MNI POLICY: IMF WEO: EZ, UK 2019 F'casts Lowered From Oct WEO

--IMF See Eurozone '19 Annual Growth At 1.3%, UK Growth Forecast at 1.2%

     LONDON (MNI) - Growth across the Eurozone is expected to slow this year,

before picking up modestly in 2020, the International Monetary Fund said in the

latest edition of the World Economic Outlook released Tuesday morning ahead of

its Spring meeting.

     --Weaker-than-expected outturns in the first quarter of the year have led

to downward growth revisions for both the euro area and the UK. The Fund

forecasts euro area GDP growth of 1.3% this year and 1.5% next year. That

compares with an October forecast of 1.9% and 1.7% for 2019 and 2020

respectively. In the UK, 2018 growth is now seen at 1.2%, down from a forecast

of 1.5% in October.

     --France, Germany, Italy and Spain, the currency bloc's largest economies,

all saw their growth forecasts for 2019 downgraded from October forecasts, with

France and Germany leading the revisions lower. The Fund now expects France to

grow 1.3% and Germany to grow 0.8% in 2019. Although growth is expected to

recover in the first half of 2019 as some of the temporary factors that held

activity back dissipate, carryover from the weakness in the second half of 2018

is expected to hold the 2019 growth rate down, the IMF said. Italy's growth

forecast is also lower than in the October 2018 WEO, estimated at 0.1% for 2019,

down from 1.0%.

     --In the UK, growth is projected to slow to 1.2% in 2019 and 1.4% in 2020.

This forecast represents a downward revision of 0.2 percentage point for 2019

relative to the October 2018 WEO, driven by weak growth in the first quarter of

the year. The Brexit outcome remains a key unknown, however. "This baseline

projection assumes that a Brexit deal is reached in 2019 and that the United

Kingdom transitions gradually to the new regime. However, as of mid-March, the

form Brexit will ultimately take remained highly uncertain," the WEO said.

     --Headline inflation in the euro area is expected to be 1.3% in 2019 and

1.6% in 2019. With the recovery boosting growth above potential for 2018-19.

HICP is projected to increase slowly to 2% by 2022.

     --In the UK, CPI is expected to stabilize at its medium-term level of 1.8%

in 2019, before heading back to the Bank of England's 2.0% target in 2020.

     With its latest round of forecasts, the IMF is now pretty much in line with

recent projections published by the European Commission, the European Central

Bank and the Bank of England. 

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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