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Despite volatile markets and inconsistent economies triggered by Russia’s ongoing invasion of Ukraine, European Central Bank President Christine Lagarde has played down concerns about eurozone stagflation.

During a conference in Paris on Monday, Lagarde revealed that the ongoing war will have consequences for growth driven by high inflation. She noted that the challenge faced by the Central Bank is to maintain price stability, without hurting activity.

Ruling out the possibility of stagflation, she said: “Even in the bleakest scenario, with second-round effects, with a boycott of gas and petrol, and a worsening of the war that goes on for a long time — even in those scenarios, we have 2.3 percent growth.”

She added: “We are not seeing elements of stagnation now.”

During the conference, Lagarde declined to discuss the ECB’s monetary policy stance. 

However, she made it clear that it will not move at the same pace as the US, where the Federal Reserve rate was hiked last week.

She added that Europe and the US are not in the same phase of the economic cycle, as Europe is more exposed to war.