Panel remarks by Christine Lagarde, President of the ECB, at the International Business Council of the World Economic Forum The global economy is at a challenging juncture. But despite recent trade tensions and substantial uncertainty, global growth has remained broadly steady so far. This resilience has been mainly driven by tariff-induced distortions of economic activity. In the first quarter of the year, for example, we saw strong global frontloading as importers boosted their inventories in anticipation of higher tariffs. That has led...

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By Pablo Anaya Longaric, Katharina Cera, Georgios Georgiadis and Christoph Kaufmann Investors who sell off sovereign bonds in times of stress are commonly referred to as “vigilantes” as they punish governments for what they consider to be bad policy choices. This post finds that investment funds account for most net sales of sovereign bonds in such times. Financial markets are sensitive to macroeconomic and political news, especially given the high debt levels in several euro area countries. On sovereign bond markets,...

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But in most situations, productivity is the better path to prosperity Competitiveness, Michael Porter remarked in The Competitive Advantage of Nations, his 1990 best-selling book, means different things to different people. As a member of US President Ronald Reagan’s competitiveness commission in the 1980s, the American economist met business leaders who believed it was about a global strategy to compete in world markets and members of Congress who thought it meant having a positive balance of trade. Today this commonly used...

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Prepared by Adam Baumann, Cristina Checherita-Westphal, Georgi Kocharkov, Steffen Osterloh Published as part of the ECB Economic Bulletin, Issue 5/2025. Fiscal policies in the euro area are increasingly shaped by a focus on defence spending in response to heightened geopolitical tensions. The February 2025 Munich Security Conference, the launch of the European Commission’s Preparedness Union Strategy in March and the conclusions of the June 2025 NATO Summit all underscored EU governments’ commitment to increasing defence spending. This box uses data from the ECB Consumer...

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Prepared by Adam Baumann, Luca Caprari, Maarten Dossche, Georgi Kocharkov and Omiros Kouvavas Consumer confidence plays an important role in determining economic activity. Thanks to timely availability and close co-movement with economic activity, analysts and policymakers closely monitor consumer confidence indicators to help them assess the strength of the economy (Barsky and Sims, 2012; Dees and Brinca, 2013; Ludvigson, 2004). They typically summarise information about consumers’ perceptions of current and future economic conditions and expectations for households’ financial situations and their...

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By Vladimir Klyuev, James Tebrake, IMF The updated System of National Accounts better captures digitalization, intangible assets, and global production—helping governments support growth, jobs, and investment The cornerstones of our digital world—from smartphone apps to new digital assets and artificial intelligence tools—didn’t exist back in 2008, the last time the world’s statistical community overhauled its approach to standardizing how countries measure the economy. Now, an updated System of National Accounts—the global standard for producing measures of economic activity—more fully incorporates emerging technologies, digital services,...

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