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Lagarde says AI investment will shape euro area inflation and monetary policy

Lagarde said AI investment could drive firms’ borrowing, with AI-related borrowing accounting for roughly a quarter of credit growth and firms targeting about 10% of total investment to AI in 2026.

Reported · Written up by our desk · Central Banks

European Central Bank President Christine Lagarde told a European Parliament committee that artificial intelligence is likely to affect how the euro area economy produces, works, and innovates, with implications for monetary policy.

Lagarde said firms are expected to devote around 10% of total investment to AI in 2026, and that AI-related borrowing already makes up roughly a quarter of credit growth to firms, while AI also has potential to improve Europe’s productivity and living standards.

She added that AI is already affecting, and could further influence, investment, labor markets, and inflation, meaning it matters for the ECB’s policy decisions. Lagarde also cited resilience in the euro area economy, pointing to solid real GDP growth in the second quarter of 2026 despite an energy shock.

In her remarks, Lagarde said she would first discuss the outlook for the euro area economy and the ECB’s latest monetary policy decisions, then outline how AI may affect inflation and the wider economy.

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