New European Central Bank (ECB) boss Christine Lagarde has kept open the possibility of a fresh stimulus package for the eurozone after admitting that a plan to inject €20bn a month into the financial system was unlikely to push growth and inflation back to target.

Speaking after her first policy meeting as ECB president, Lagarde said the central bank would keep interest rates at historic lows and maintain the plan hatched by her predecessor Mario Draghi to re-start quantitive easing to cut the cost of borrowing and boost growth.

But she said a wide-ranging review of the ECB’s strategy – the first since 2003 – could allow policymakers to expand the number of tools used to stimulate growth and push inflation back towards the target level of 2%.

The review is expected to begin in January and be completed by the end of 2020. In the meantime, the ECB’s current stimulus programme is expected to remain in place.

Lagarde said there was no need to panic even though the risks to the outlook for growth and inflation remained tilted to the downside because the risks were slightly lower following a more stable forecast for global trade and growth next year.

The eurozone is expected to grow by 1.2% this year after the US/China trade war triggered a recession in the manufacturing sector that hit the currency bloc’s largest economy, Germany, the hardest.

Meanwhile, employment and wages continue to rise across the currency bloc, she said, and the services sector and construction industry were in rude health.

The ECB’s fresh estimates have only changed modestly since its last outlook in September.

Inflation is expected to rise to:

2019: 1.2%, unchanged

2020: 1.1%, up from 1.0%

2021: 1.4%, down from 1.5%

2022: 1.6% - a new forecast

But GDP growth is expected to remain unchanged in 2022:

2019: 1.2%, up from 1.1%

2020: 1.1%, down from 1.2%

2021: 1.4% - unchanged

2022: 1.4% - a new forecast

Aware that financial traders would be looking for any changes in the ECB’s policy direction, Lagarde took pains to urge observers not to mull over her every word or compare her to former ECB presidents.

“Don’t over interpret, don’t second guess, don’t cross reference – I’m going to be myself and therefore probably different,” she said.

“Once and for all, I’m neither a dove nor a hawk, and my ambition is to be this owl, that is often associated with a little bit of wisdom.” Doves are expected to be more in favour of promoting growth while hawks support policies that restrict inflation.

She repeated the calls made by her predecessor for eurozone governments with surplus funds or the capacity to borrow to increase public investment.

“It takes many to dance the economic ballet that delivers price stability and economic growth,” she said.

Draghi spent much of his tenure as ECB president imploring eurozone government to increase spending on infrastructure and to fund structural reforms.

Paul Diggle, a senior economist at Aberdeen Standard Investments, said: “[Lagarde] gave a slightly more upbeat assessment of the growth and inflation outlook; sounded slightly more cautious about the negative consequences of negative rates; stepped up the lobbying of governments to loosen fiscal policy; and gave a sneak-peek of the topics the ECB strategic review will cover.”