Regional Economic Outlook, October 2011, Europe: Navigating Stormy Waters
Europe, October 5, 2011
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- Regional Economic Outlook, October 2011, Europe: Navigating Stormy Waters
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Bibliographic details
- Published: October 5, 2011
- Series: Europe
- DOI: https://doi.org/10.5089/9781616351281.086
Overview
- Following a strong showing in early 2011, the economies across Europe now face the prospect of a pronounced slowdown, as global growth has softened, risk aversion has risen, and strains in Europe's sovereign debt and financial markets have deepened.
- Downside risks are significant, and a further deepening of the euro area crisis would affect not only advanced Europe, but also emerging Europe, given its tight economic and financial ties.
- The cross-country experience in the past decade in Europe shows the difference that good policies can make in boosting growth, with some European countries having grown rapidly while others have stagnated.
- Escaping low-growth traps, through broad-based reforms that address macroeconomic imbalances and country-specific structural rigidities, is possible.
Risks and spillovers
- Global growth has softened.
- Risk aversion has risen.
- Strains in Europe's sovereign debt and financial markets have deepened.
- A further deepening of the euro area crisis would affect advanced Europe and emerging Europe because of tight economic and financial ties.
Policy recommendations and required actions
- The policy stance in advanced Europe will need to be adapted to reflect the weakening and tense outlook.
- Financial systems should be strengthened further.
- A consistent, cohesive and cooperative approach to monetary union should be adopted by all euro area stakeholders.
- Broad-based reforms should address macroeconomic imbalances and country-specific structural rigidities to escape low-growth traps.
Subjects and keywords (as listed)
- Subjects: Banking, Expenditure, Exports, Financial crises, Fiscal consolidation, Fiscal policy, Imports, International trade, Labor, Labor markets
- Keywords: Asia and Pacific, Baltics, CESEE banking systems, CESEE economy, CESEE operation, country, country index, Europe, expenditure growth, expenditure rule, Exports, Fiscal consolidation, Global, IMF staff calculation, Imports, Labor markets, output spillover, Panel VAR model, REO, Western Europe
Content in this bundle
- IMF Regional Economic Outlook: Europe - Navigating Stormy Waters, October 2011