Salient to Investors:

The IMF said:

  • European growth will rise to 1.7% in 2016 versus 1.5% in 2015 thanks to falling oil prices, a weaker euro and ECB actions this year.
  • Europe remains vulnerable to shocks that could bring prolonged stagnation, like Greece or a moderate shock to confidence from lower expected future growth or heightened geopolitical tensions.
  • The growth outlook for the next 5 years is clouded by high unemployment, especially among the young, large corporate debt, rising non-performing bank loans.
  • Inflation will remain near zero in 2015 and rise to 1.1% in 2016.
  • The ECB’s asset-buying program has boosted confidence and improved financial conditions and should continue until at least September 2016.

Andrew Walker at  BBC said the IMF is saying the eurozone needs more than just reform of the structure of the eurozone and effort from struggling members: it wants countries with excessive current account surpluses, like Germany and Netherlands, to invest more in infrastructure and to boost demand.

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