The IMF raises the growth forecast for Europe to 0.8 for 2023

The International Monetary Fund (IMF) reported that Europe’s economic growth forecast for this year increased by 0.2 percentage points to 0.8 percent.

In the IMF’s “European Regional Economic Outlook” report, it was stated that Europe faces the difficult task of maintaining its economic growth and at the same time reducing inflation, noting that despite the recent decline, inflation in the region is still at a very high level.

In the IMF report, it was indicated that the economic growth forecast for Europe for this year was increased by 0.2 points to 0.8 percent, and for 2024 by 0.3 points to 1.7 percent.

INFLATION REDUCED INCOME

In the report, it was claimed that inflation in Europe eased in the middle of last year as household incomes fell, while it was emphasized that a recession could be avoided with lower energy prices this winter and the financial situation. support provided by governments.

“The outlook for Europe is one of slow growth and persistent inflation.” In the report, it was noted that lower energy prices and the expected increase in consumer purchasing power are expected to positively affect economic growth in the coming period.

‘DEVELOPMENTS WILL GROW 1.2 PERCENT THIS YEAR’

In the report, it was noted that the growth of developed European economies is expected to grow by 0.7 percent, and growth is expected to rise to 1.4 next year.

In the IMF report, it was noted that growth in emerging European economies increased by 0.7 percentage points to 1.2 percent this year, while the growth forecast for 2024 was lowered by 0.1 percentage points to 2.4 percent.

In the organization’s report, it was noted that inflation in advanced European economies is expected to decline to 5.6 percent this year and 3 percent next year. The report recalled that the growth forecast for the Eurozone for this year increased by 0.3 points to 0.8, and for next year to 1.4 by decreasing 0.4 points.

In the IMF report, it was emphasized that the German economy is expected to contract 0.1 percent and grow 1.1 percent next year, while the French economy is expected to grow 0.7 percent. this year and 1.3 percent next year.

In the IMF report, it was noted that the British economy is expected to grow 1 percent in 2024, after contracting 0.3 percent this year.

FINANCIAL STABILITY RISK WARNING

In the report, which also addressed risks related to Europe’s economic outlook, “failing to control financial stability risk can lead to a crisis and low growth.” has been warned.

In the report, it was noted that tighter monetary policy may heighten concerns in the financial sector, and that contraction in the labor market and possible increases in energy prices may suppress growth and cause inflation to rise again.

The IMF report included the following assessments of the monetary policy-inflation relationship:

“Tight monetary policy is needed to purposefully reduce inflation to the central bank’s targets. While more policy rate hikes are needed in the eurozone, central banks in emerging European economies should be prepared to tighten further in economies where real rates are low, labor markets are tight, and inflation persists. underlying is high.

In the report, which recommended that governments be more aggressive in fiscal consolidation, it was stated that a tighter monetary policy would support the reduction of inflation.

Türkiye LOWERS ITS ESTIMATE

In the IMF report, the economic growth forecast for the Turkish economy for this year was lowered by 0.3 points to 2.7 percent, while the growth forecast for next year was increased by 0.6 points. up to 3.6 percent.

In the part of the report on the Turkish economy, it is stated that the February earthquakes caused a financial burden of approximately $104 billion, as well as loss of life, while “the public sector will probably bear most of the cost of a significant rescue.” and reconstruction efforts. expression found.

“Given support from the international community and private investment will help meet some of the reconstruction and relief needs, the burden on the public sector is likely to be large,” the report says. evaluation was included.

The IMF report also predicted that restructuring in the regions affected by the earthquakes would alleviate the negative impact on economic growth. (AA)