Frankfurt (Germany), 20 August (LaPresse) – "The euro area economy showed resilience at the beginning of this year in the face of a difficult global environment. This was mainly due to two factors. First, the export-oriented European economy benefited from global frontloading, growing more than expected in the first quarter of the year. Sectors with greater exposure to exports to the United States, such as pharmaceuticals, which account for more than a fifth of euro area exports to the United States, recorded strong output growth in this period. Of course, with the current increase in tariffs, this effect is reversing and the expected slowdown in euro area growth was already evident in the second quarter of this year." This was stated by the President of the European Central Bank (ECB), Christine Lagarde, in her speech to the International Business Council of the World Economic Forum. ‘The second factor supporting the economy was the strengthening of private consumption and investment, which contributed positively to growth,’ Lagarde continued. "In addition, the labour market remains solid. The unemployment rate, at 6.2% in June, has remained virtually unchanged over the past year, while the labour force has continued to grow. Looking ahead, according to the Eurosystem's June projections, growth is expected to slow in the third quarter as frontloading unwinds. The recent trade agreement between the European Union and the United States imposes higher tariffs on euro area goods than the US tariff regime in place before April." ‘The trade agreement establishes an estimated average effective tariff of between 12% and 16% on US imports of euro area goods. This average effective tariff is slightly higher than, but still close to, the assumptions used in our baseline projections last June,’ the ECB President explained.
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