European Central Bank President Christine Lagarde on 27 May warned that the eurozone economy will likely shrink by between 8% and 12% this year, a deeper downturn than previously anticipated, as governments battle the coronavirus pandemic.

Lagarde’s comments are the latest signal that the ECB is preparing to increase its stimulus as soon as next week, in an effort to shore up plunging economic growth and inflation. Analysts expect the bank to vastly scale up a recently unveiled €750bn ($821.6bn) bond-buying program at a policy meeting on June 4.