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August 11th 2005

IMF warns of slowing growth in EU

The International Monetary Fund (IMF) recently reported on the prospects for growth in Euro-area economies. The report reinforced what most economists have argued for months: growth is slowing in the EU. The IMF now forecasts 2005 real GDP growth of 1.3% for the Euro, down from earlier forecasts of 1.9%. In comparison, it is expected the US economy will achieve 3.5% growth this year. The IMF also expects inflation in the Euro-area to decline. While it now seems that all of the pieces are in place for a cut in interest rates, the ECB voted last week to maintain current interest rate levels. It seems the Bank is simply resistant to economic logic. Xinhua News reports:

The IMF urged euro-zone governments to cut their budget deficits. It also warned that the euro-zone’s economic recovery remains vulnerable to soaring oil prices or the euro’s further appreciation.

Read More: IMF cuts economic growth forecasts for euro-zone

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Posted by Adam Kritzer | in Economic Indicators, Euro | No Comments »

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