Euro zone inflation is likely to rise more in the second half of 2021 but then decline as temporary factors fade out, European Central Bank President Christine Lagarde said on Thursday.

Inflation in the euro zone rose to 2% last month, lifted by rising energy prices to its highest rate since late 2018 and above the ECB’s target of “below but close to 2%”.

But ECB policymakers have been adamant that the current rebound will not last as it simply reflects a slump in prices in spring 2020, when the economy was almost shut down by the coronavirus pandemic and oil prices briefly turned negative.

Economists polled by Reuters expect headline inflation in the euro zone to average 1.8% this year before easing back to 1.3% in 2022 and 1.5% in 2023.
Source: Reuters (Reporting by Francesco Canepa; Editing by Catherine Evans and Hugh Lawson)