Though their last economic assessment of the eurozone was published only a few week's ago, the IMF are already considering another downgrade to their growth projections. Today's Financial Times reports the IMF is gloomier over eurozone growth outlook, with Claus Hulverscheidt and Ralph Atkins at Financial Times Deutschland claiming that draft growth projections in the IMF's next World Economic Outlook, to be published late next month, indicate the outlook for eurozone growth has weakened further thanks to Italy:
Italy's weak economy has led the International Monetary Fund to revise downwards again its forecast for eurozone economic growth this year, to just 1.3 per cent. ...Earlier this year the IMF had forecast a eurozone growth rate for 2005 of 1.6 per cent - itself a substantial downwards revision from the growth rate of more than 2 per cent that had been expected in 2005 late last year.
The IMF are also less bullish on German growth prospects than some other commentators. Germany is expected to see higher growth this year, but the IMF have downgraded their 2006 forecast:
Although they have still to be finalised, the IMF's latest forecasts ..also suggest the recovery seen in coming months by many economists in Germany, the eurozone's largest economy, will not be dramatic. German exporters have benefited from the recent weakness of the euro, while business confidence has been boosted by the prospect of structural reforms accelerating after federal elections on September 18.
...The IMF forecast for German growth this year has risen slightly, from 0.8 per cent to 1 per cent. But the Washington-based institute has slashed its German forecast for 2006 from 1.9 per cent to 1.3 per cent. At the same time the IMF expects Germany's public sector deficit will exceed the European Union's limit of 3 per cent of gross domestic product in this year and next.
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