The IMF underlines the surprising resilience of the euro area economies

Petya Koeva-Brooks ©Jose Luis Magana/Copyright 2023 AP. All rights reserved.

Euro area economies have shown surprising resilience in the face of multiple disruptions, says the IMF.

Petya Koeva-Brooks, deputy director of the IMF’s research department, told RockedBuzz via Euronews that the global economy remained on track for a global recovery, despite a downward readjustment of forecasts.

“We were surprised by the resilience that euro zone economies have shown after adjusting to the shock,” he said. “Some of that has relied on non-Russian gas and liquefied gas sources, and we have seen a reorientation of some supplies from Asia.

“And at the same time, we also saw another part of the adjustment towards switching to other energy sources that ultimately helped have a growth rate of the euro area economy last year, in the order of 3.5%, which is a pretty good growth rate, again, considering the size of the shock.

“Our baseline forecast is still for a soft landing of the global economy and advanced economies. So that’s our baseline. What we’re saying is that the risks around it have increased and downside risks in particular If we look at the German economy, we expect growth this year to be very close to zero minus 0.1%, which is a small downgrade from what we had in January, due to tighter financial conditions and the tighter monetary policy needed to fight inflation.

“At the same time, we expect growth to pick up in Germany, the euro area and the world at large in 2024.”