INTERNATIONAL MONETARY FUND : LATEST IMF FORECAST SUGGESTS DELAYED RECOVERY.

The EU's economic recovery continues to drag, the newest growth figures from International Monetary Fund (IMF) suggest. In an update, published on 9 July, to its April 2013 'World economic outlook', the fund has revised growth forecasts across the board downward by about 0.25%. That means the eurozone is set to contract 0.5% in 2013 and to register growth of less than 1% in 2014. The eurozone's largest economy, Germany, will grow by 0.3% this year, while Spain's economy will shrink by 1.6% and Italy's by 1.9%. The EU economy is forecast to contract by 0.1% this year and to grow by 1.2% in 2014. Europe remains the weakest performing region in the world. The closest to it is the United States, which is due to grow by just under 2% this year, while the emerging and developing economies combined are expected to grow by 5% in 2013 (see box).

Low demand, depressed confidence and weak balance sheets are contributing to the anemic state of the EU economy. Sovereign spreads in the eurozone widened again in May and June, having previously declined, it notes. As for policy prescriptions, the IMF recommends that the EU review bank assets specifically to quantify capital needs, "supported by European...

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