ECB's Lagarde Says Pandemic Still Poses Serious Economic Risks

The video discusses the ongoing risks posed by the COVID-19 pandemic to public health and the global economy, particularly in the euro area. Despite the encouraging prospects of vaccine rollouts, economic activity has been significantly restricted, especially in the services sector, due to rising infection rates and containment measures. While manufacturing remains resilient, inflation is low due to weak demand and market slack. The data suggests a more severe short-term economic impact and prolonged inflation weakness than previously anticipated.

What factors are contributing to the low inflation mentioned in the text?

What does the incoming data suggest about the near-term impact of the pandemic on the economy?