In the Regional Economic Outlook report, IMF downgraded Eurozone growth forecasts for both 2019 and 2020. It said that “global trade and manufacturing have weakened and so have these sectors in Europe… , European exports are softening and prospects for a recovery in global trade are not as strong as they were six months ago”. IMF also urged that “monetary policy should remain accommodative where inflationary pressures are still subdued, which is the case in most European economies. ”
Eurozone economy is projected to slow sharply from 1.9% in 2018 to just 1.2% in 2019, revised down from 1.3%. Mild recovery is expected in 2020 by 1.4% (revised down from 1.5%), and stay there in 2021. Headline inflation to projected to slow from 1.8% in 2018 to 1.2% in 2019 (revised down from 1.3%), then climb to 1.4% in 2020 (revised down from 1.6%) and then 1.5% in 2021 (revised down from 1.7%).
