IMF predicts European economy will rebound this year by overcoming all crisis
DUBLIN: The International Monetary Fund (IMF) shares the hope that the European economy will rebound this year, overcoming the COVID-19 crisis. However, the IMF has also revealed some crucial issues related to this return. The IMF warns that inequality between countries will be a problem in the speed and effectiveness of the return. The IMF also calls for the establishment of a new social contract to address inequality.
These views are reflected in the IMF’s Regional Economic Outlook for Europe. The IMF predicts that Europe’s growth rate this year would be 4.5%.This is 0.2% lower than the forecast made last October.
The decline is thought to be due to lockdowns from new waves of COVID-19. The IMF expects 3.9% growth in Europe in 2022.
The IMF describes to vaccines as “gamechanger”. However, the report notes that the pace of progress in Europe remains moderate and varies significantly across countries.
The agency says that although industrial production has returned to pre-pandemic levels, service activity has been declining in countries such as Croatia, Italy, and Spain.
The IMF points out that the biggest threat to growth is virus mutations and delays in vaccine programs.
The concerned central banks have been able to accommodate the financial conditions. The agency urged governments to continue to support jobs and economic recovery. They also reminded that government spending has to play a bigger role.
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