MOSCOW, July 24 (RIA Novosti) - Regardless of little revision to EU growth forecast, Europe’s progress towards economic recovery is virtually non-existent falling victim to unacceptably low inflation, the International Monetary Fund (IMF) announced Thursday.
“The recovery in the Euro area remains weak, and inflation remains too low. Our forecasts for the Euro area remain roughly unchanged, 1.1% for 2014, and 1.5% for 2015,” IMF Chief Economist Olivier Blanchard said, explaining that these numbers conceal “differences across countries,” with specific European economies moving in the opposite direction but at a similar pace.
“In most Euro countries, unemployment rates far exceed their equilibrium value, and Euro wide inflation is too low,” Blanchard continued with the opening remarks to his presentation in Mexico City, supportive of the recent measures of the European Central Bank (ECB), admitting that such measures should be extended for the desired effect.
In mid-July the IMF stressed the urgent need to carry out structural reforms to spur investment, employment and productivity in the Eurozone. The IMF’s executive board then stressed that recovery levels are insufficiently strong, financial markets remain fragmented, and borrowing costs are still high in distressed EU economies.
The WEO presents the IMF global-scale analysis and forecasts of key economic developments, released in April and September-October each year with separate updates announced and published if the economic circumstances so require.
The current revision to April’s projections on EU may seem neutral, but the inherent discrepancies across the economies of EU member states are steadily pushing the region towards a zero-sum game, with front-runners like Germany compensating for those countries that lag far behind.