IMF Warns of Slow Growth in Europe... “Europe Has Yet to Emerge From Crisis”

[Financial News] A senior International Monetary Fund (IMF) official urged Europe on the 12th (local time) to accelerate reforms to prepare for possible economic crises ahead.
According to Agence France-Presse (AFP), IMF European Department Director Mateusz Szczurek warned that day, “Europe has not yet emerged from the crisis.”
Szczurek said that “high energy prices will continue to weigh on the economy” and pointed out that “rising government bond yields are a warning that fiscal problems cannot be ignored.”
The IMF projected that the average economic growth rate among Eurozone members (the 21 countries that use the euro), excluding Ireland, would reach 1.2% this year before edging down slightly to 1.1% next year.
Szczurek warned that, with growth expected to remain fragile and sluggish, a shock at this level of growth could lead to a recession.
The IMF called on Europe to maintain prudent monetary and fiscal policies while pursuing reforms that could raise its growth potential. It particularly urged efforts to strengthen the European Union (EU) single market.
Szczurek urged France, where protests over high prices have continued, to “pass its 2027 budget as soon as possible.”
Regarding France’s presidential election next April, he said, “This election will be an opportunity to chart a course that combines the adjustments needed to make public finances sustainable with reforms to boost medium-term growth.”
As concerns about public finances mounted, government bond yields rose across Europe. In France, the yield on 10-year government bonds recently topped 5% for the first time since 2002.
Szczurek said Europe had weathered the energy shock better than it had feared, adding, “One reason was progress in the energy transition, which has reduced dependence on imported fossil fuels through the expansion of renewable energy.”

[email protected] Lee Seok-woo, International Affairs Correspondent Reporter