REPEAT:MNI POLICY:IMF WEO:EZ,UK 2018 F'cast Lowered From April

Repeats Story Initially Transmitted at 01:00 GMT Oct 9/21:00 EST Oct 8

--IMF See Eurozone '18 Annual Growth At 2.0%, Also Below July Update 2.2% Fcast

     LONDON (MNI) - Growth across the Eurozone is expected to decelerate this

year, before softening modestly again in 2019, the International Monetary Fund

said in the latest edition of the World Economic Outlook released Tuesday

morning at its annual meeting in Bali.

     --Weaker-than-expected outturns in the first half 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 2.0% this year and 1.9% next year. That compares with an

April forecast of 2.4% and 2.0% for 2018 and 2019 respectively. In the UK, 2018

growth is now seen at 1.4%, down from a forecast of 1.6% in April.

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

all saw their growth forecasts for 2018 downgraded from April forecasts, with

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

grow 1.6% and Germany to grow 1.9% in both 2018 and 2019. Healthy consumer

spending and job creation amid supportive monetary policy are expected to

continue to provide strong aggregate demand, though at a moderating pace, the

IMF said. Italy's growth forecast is also lower than in the April 2018 WEO,

estimated at 1.2% for 2018 and 1% for 2019.

     --In the UK, growth is projected to slow to 1.4% in 2018 and 1.5% in 2019.

This forecast represents a downward revision of 0.2 percentage point for 2018

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

the year, partly due to weather-related factors. Assumptions regarding the

Brexit outcome remain broadly unchanged relative to the April 2018 and October

2017 WEOs, the IMF added. "Tariffs on trade with the European Union are expected

to remain at zero, and nontariff costs will likely increase moderately," the WEO

said.

     --Headline inflation in the euro area is expected to be 1.7% in 2018 and

2019. With the recovery boosting growth above potential for 2018-19, core

inflation is expected to increase to 1.2% in 2018 and 1.6% in 2019, up from 1.1%

in 2017. HICP is projected to increase slowly to 2% by 2022.

     --In the UK, as the pass-through effects of the pound depreciation fade,

core inflation isexpected to decline to 2.1% in 2018, down from 2.4% in 2017.

CPI is expected to stabilize at its medium-term level of 2.0% in early 2020.

Headline inflation is expected to edge down to 2.5% in 2018, from 2.7% in 2017,

with a gradual convergence to 2% projected in 2020.

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

recent projections published by the European Commission and the European Central

Bank. 

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

--MNI Washington Bureau; tel: +1 202-371-2121; email: kevin.kastner@marketnews.com