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European Central Bank President Christine Lagarde attends an Eurozone Finance Ministers meeting in Brussels, Belgium, Feb. 17, 2020.Francois Lenoir/Reuters

The European Central Bank is bracing for a “large contraction” in the euro zone economy and, at least initially, falling inflation, ECB President Christine Lagarde told financial policymakers from around the world on Thursday.

“In the euro area, incoming economic data, particularly recent survey results, have started to show unprecedented falls, pointing to a large contraction in output in the euro area, as well as to rapidly deteriorating labour markets,” Lagarde told the International Monetary and Financial Committee.

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