The International Monetary Fund on Tuesday raised its economic growth forecast for the euro area in 2021, with France and Italy performing better than expected and restrictions linked to the pandemic have eased.
In a report released as the IMF and World Bank hold their semi-annual meetings, the Fund said it now expects growth of 5% for the single currency area, down from just 4.6% in its previous forecast. July.
“The euro area, after a very difficult first quarter mainly due to the pandemic, has rebounded very strongly as our health restrictions have changed,” said Paschal Donohoe, chairman of the Eurogroup of euro area finance ministers which has participated in meetings.
“We will see a return to pre-pandemic levels by the end of the year.” The IMF has also sought to allay concerns over inflation, which is closely watched by markets waiting to see when the European Central Bank ends its economic stimulus measures.
He said he expected consumer prices to return to pre-pandemic levels by the middle of next year. Eurozone growth forecasts contrast sharply with those of other major economies for which the IMF lowered its outlook on Tuesday.
He predicted growth of 6% in the United States, down one point. Production is now estimated at 8% in China and 6.8% in the UK, both slightly lower than previously thought.
In Europe, however, France is expected to do better than initially expected, growing 6.3% after a recession in 2020.
On Monday, the French government itself revised its expectations for the year to 6.25%, following the success of the Covid vaccination campaign and the implementation of a health pass that had little impact. impact on economic activity.
Italy is also expected to experience better-than-expected growth at 5.8%. Germany, however, saw its 2021 growth cut to 3.1% due to supply shortages affecting the industrial sector.