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--IMF See Eurozone '18 Annual Growth At 2.4%, Above Oct 1.9% Fcast
by Chris Mc Innes
BERLIN (MNI) - Growth in the Eurozone is expected to accelerate this year
before softening in subsequent years. The upswing is set to be supported by
strong domestic demand, low interest rates and a thriving external sector, the
International Monetary Fund said Tuesday.
The Fund forecasts GDP growth of 2.4% this year and 2.0% next year in its
World Economic Outlook. That compares with a January forecast update of 2.3% and
2.0% for 2018 and 2019 respectively. In its October World Economic Outlook, the
IMF had only pencilled in growth of 1.9% and 1.7% for 2018 and 2019.
France, Germany, Italy and Spain, the currency bloc's largest economies,
all saw their growth forecasts for 2018 upgraded, with Spain leading the pack
with a 0.4 percentage point increase. The Fund now expects both France and
Germany to grow 2.0% in 2019, following a 0.1 percentage point improvement in
France's 2019 projection.
According to the IMF, the upward revision reflects "stronger-than-expected
domestic demand across the currency area, supportive monetary policy, and
improved external demand prospects."
"Medium-term growth in the euro area is projected at 1.4 percent, held back
by low productivity amid weak reform efforts and unfavourable demographics," the
With its latest round of forecasts, the IMF is now at the more optimistic
end of the spectrum compared to recent projections published by the European
Commission and the European Central Bank. This might suggest that the Fund views
the recent patch of soft data printed across the Eurozone as only temporary.
--MNI London Bureau; tel: +44 203-586-2225; email: email@example.com