The International Monetary Fund expressed pessimism regarding the state of the European economies in 2022 and the ensuing year, citing the reduction in growth and the continued high levels of inflation as well as the possibility of energy shortages, which might make the situation worse. The fund stated that “European prospects have decreased dramatically” in its regional prediction, which was released on Sunday.
” The fund explained in its report that “Europe was on its way out of the epidemic at the end of 2021 with a mixture of appropriate policies globally, while the high inflation was on its way to decline”, but “the war in Ukraine and its repercussions fully changed these horizons. ”
With the exception of Turkey and the nations involved in a conflict, it is anticipated that growth in the continent of Europe will reach 3.2% in 2022 and 0.6% in 2023, as opposed to 0.7% and 1.0%.
1 points higher than anticipated in prior projections released in July. Inflation is predicted to slow in 2023, but it will still be extremely high, with the IMF projecting that it will hit 6.2% in advanced European economies and 11.8% in emerging European economies.
The picture is gloomy because, according to the IMF, “one of the most important risks in the immediate term is the power supply instability, which can, combined with a cold winter, can lead to a lack of gas and the legalising and deeper economic issues.” According to the IMF, social unrest may worsen in reaction to the cost-of-living crisis. What leads to governments adopting a “more expansionist budget policy that can compel central banks to tighten their monetary policy more.
The International Monetary Fund stated that “European decision-makers have challenging political alternatives in the face of a mixture of weak growth and excessive enlargement that can intensify. The creative recession—defined as at least two consecutive semesters of negative GDP growth—is anticipated in several regions of Europe, but the author cautioned that it “may morph into a deeper recession throughout the continent.” The International Monetary Fund held three at the international level.
2% is what’s expected For growth in 2022, and reduced its expectations for 2023 to 2. 7%..
International Monetary Fund: Europe’s future prospects have dramatically deteriorated
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