Euro Area Policies: 2017 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Member Countries
IMF Staff Country Reports, July 25, 2017
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- Euro Area Policies: 2017 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Member Countries
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Bibliographic details
- Published: July 25, 2017
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781484312346.002
Near-term growth outlook and drivers
- The cyclical recovery in the euro area is firming and becoming broad based.
- Factors boosting domestic demand:
- Lower energy prices
- Supportive policies
- Stronger labor markets
- A recovery in credit growth
- Especially stronger private consumption
- Near-term growth projections:
- Growth of 1.9 percent expected in 2017
- Growth of 1.7 percent expected in 2018
Inflation dynamics
- Headline inflation picked up in the first half of 2017 owing to higher energy prices.
- Core inflation has remained persistently low.
Risks, buffers, and policy implications
- The improving near-term outlook is clouded by significant downside risks, especially in the medium and long term.
- Risks are heightened by thin policy buffers.
- Policy focus implied by the analysis:
- Sustain supportive policies to reinforce the recovery
- Address persistently low core inflation
- Strengthen policy buffers to reduce medium- and long-term downside risks
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- Country Report