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Thursday, January 21, 2021

IMF cuts euro zone forecasts, as Germany slows

Duration: 01:25s 0 shares 1 views
IMF cuts euro zone forecasts, as Germany slows
IMF cuts euro zone forecasts, as Germany slows

Growth in the euro zone and its biggest economy, Germany, is set to slow more than expected, according to the IMF.

David Pollard reports.

VW debuted its first entirely electric model on Monday (November 4) - with Chancellor Merkel as guest.

Though even at the time she may have been wondering whether Germany has lost its charge.

The latest assessment comes from the IMF.

Its downwardly revised forecast puts growth this year at 1.2%, compared to 1.9 last year.

That's for the euro zone.

Amid a wave of data suggesting trade tensions and Brexit confusion are edging Europe's largest economy into recession.

Germany itself is seen growing just half a per cent.

It all frames difficult policy questions for Christine Lagarde.

Though she resisted answering any when she began work as the new president of the European Central Bank on Monday.

(SOUNDBITE) (English) ECB PRESIDENT, CHRISTINE LAGARDE, SAYING: "Forget it.

Not tonight." But last week there were hints that she'll push euro zone governments hard for more fiscal stimulus - that is, to spend more.

(SOUNDBITE) (French) INCOMING PRESIDENT OF EUROPEAN CENTRAL BANK, CHRISTINE LAGARDE, SAYING: "I'm thinking obviously of countries that are in persistent budget surplus right now, like the Netherlands, Germany and a certain number of others in the world.

Others did it." Germany is not the only country in the IMF lens.

France too was downgraded to 1.2%.

As was Britain - also to 1.2%.

Though that number assumes the lesser damage of a soft - or orderly - and not a hard, Brexit.

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