The war between Russia and Ukraine will weaken eurozone economic growth and exacerbate inflation.

 Russian military aggression in Ukraine will affect economic activity and inflation in the eurozone by raising energy and commodity prices, undermining international trade, and weakening confidence, European Central Bank (ECB) Governor Christine Lagarde said during a press conference following Thursday’s meeting. “The extent of these consequences will depend on further developments, the effect of existing sanctions, and possible further measures,” she said. “The ECB’s baseline scenario, which considers early estimates of the effects of the war, assumes that the eurozone economy will grow by only 3.7 percent this year, not 4.2 percent as previously expected. As a result, the ECB raised its inflation forecast to 5.1 percent from 3.2 percent this year,” the governor continued.