Interest rate decisions remain data-driven as the digital euro moves to the political stage
Christine Lagarde, President of the European Central Bank, said the euro area economy is undergoing a structural transformation driven by rising investment in artificial intelligence. According to Euronews, cited by Agerpres, Lagarde stressed that amid persistent uncertainty, interest rate decisions will continue to rely strictly on incoming data.
Analysts highlighted Lagarde’s emphasis on AI as a core driver of investment, both among large corporations and small and medium-sized enterprises.
Spending is increasingly directed toward high-performance computing, telecommunications networks and intangible assets such as data and software, rather than traditional physical capital.
While acknowledging AI’s potential to boost productivity over time, Lagarde warned against drawing premature conclusions about its impact on the so-called neutral monetary policy stance. In an environment shaped by geopolitical shocks, trade fragmentation and elevated uncertainty, such structural parameters remain difficult to observe and were not discussed at Thursday’s Governing Council meeting.
On the digital euro, Lagarde confirmed that the ECB has completed the technical and preparatory work, with the project now under review by European political institutions.
“Our ambition is to ensure that in the digital age there is a currency that acts as an anchor of stability for the financial system. The digital euro is primarily a tool for monetary sovereignty, not innovation for its own sake,” she said.
The ECB left interest rates unchanged for the fourth consecutive meeting, forecasting euro area growth of 1.4% in 2025 and inflation at 2.1%, before falling below target in the following years.
Photo: Euronews
