News from Berlin

International Monetary Fund Predicts Increased Growth in the Euro Zone

January 22nd, 2014

The International Monetary Fund (IMF) is Optimistic About Europe’s Flourishing Economy

As the dark clouds of recession move away from Europe, the IMF have forecast economic growth for the Euro Zone during the next few years, at a faster pace than ever.

Berlin (photo: designlike.com)

News from Berlin. The global economy is well over due some optimistic news which luckily has come recently from the International Monetary Fund (IMF) as they forecast strong and fast growth over the coming years.

Although, despite the preliminary positive outlook, the risk of a new crisis has far from disappeared say the IMF as the recovery of industrialized, emerging and developing countries is still extremely fragile. The expected global growth from the global financial organization is 3.7% which is a slight increase in the last forecast which was in Autumn 2013 whilst the growth for 2015 is expected to be around 3.9%.

The IMF have revised their economic outlook for Germany, originally the prediction was that the gross domestic product (GDP) would rise by 1.4% when in actual fact it grew by 1.6%. The global increase is said to be driven by a better economical situation in industrialized countries, say the IMF. The Euro-zone growth is expected to rise from 1.0% to 1.4% this year, following two abysmal years of recession.

As with any sudden economic growth, there are risks, including low inflation which could have a strong effect in the Euro-zone, especially as the probability of deflation is increasing, since the central banks have hardly scoped for interest rate cuts. The rate of global economic development is mainly dependent on central banks to slowly reduce economic aid, rather than suddenly cut it. If economic aid was suddenly cut then emerging and developing countries would not have time to adjust to the outflow of capital; therefore stability is key in order to promote further stabilization.

Berlin Global