Russia's war against Ukraine is “severely” impacting the eurozone economy, said head of the European Central Bank Christine Lagarde.

According to her, the conflict and the associated uncertainty greatly undermine business and consumer confidence. Disruptions in trade lead to new shortages of materials and means of production. Rising energy and commodity prices are reducing demand and curbing production.

“The war in Ukraine is severely affecting the euro area economy and has significantly increased uncertainty,” Lagarde says in a virtual press conference. “The impact of the war on the economy will depend on how the conflict evolves, on the effect of current sanctions, and on possible further measures.”