IMF WEO: Eurozone 2018 Growth Seen Ahead Of January Forecast

--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

IMF said.

     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: les.commons@marketnews.com

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