Euro Area Policies: 2016 Aticle IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for the Euro Area
IMF Staff Country Reports, July 8, 2016
Source details
- Canonical URL
- Euro Area Policies: 2016 Aticle IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for the Euro Area
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Bibliographic details
- Published: July 8, 2016
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781498353298.002
Executive summary
- The recovery in euro area has strengthened recently.
- Lower oil prices, a broadly neutral fiscal stance, and accommodative monetary policy are supporting domestic demand.
- Inflation and inflation expectations remain very low, below the European Central Bank’s medium-term price stability objective.
Major findings and analysis
- Growth momentum has improved but inflation remains weak and below the ECB’s medium-term objective.
- The U.K. referendum outcome is identified as a key negative shock to near-term growth prospects for the euro area.
- Policy settings supporting demand include:
- Lower oil prices.
- A broadly neutral fiscal stance.
- Accommodative monetary policy.
Projections and key statistics
- Euro area GDP growth is expected to decelerate from 1.6 percent in 2016 to 1.4 percent in 2017, mainly owing to the negative impact of the U.K. referendum outcome.
- Growth five years ahead is expected to be about 1.5 percent.
- Headline inflation is projected to reach only 1.7 percent.
Subjects and keywords
- Subjects: Banking, Fiscal policy, Fiscal space, Fiscal stance, Inflation, Labor taxes, Macrostructural analysis, Prices, Structural reforms, Taxes
- Keywords: banking sector risk, CR, EU institution, euro, Europe, Fiscal space, Fiscal stance, Global, growth, headline inflation, Inflation, inflation expectation, inflation outlook, ISCR, Labor taxes, member state, single market, Structural reforms
International Monetary Fund. Euro Area Policies: 2016 Aticle IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for the Euro Area (IMF Staff Country Reports 2016, 219).