EU, IMF see darker outlook for eurozone growth in 2008

Dilshan Wirasekara, Chief Executive Officer of First Capital Treasuries PLC

BRUSSELS, Dec 3, 2007 (AFP) – Growth in the 13 nations sharing the euro is expected to be weaker than expected only several months ago, according to the European Commission and the International Monetary Fund on Monday. The head of the IMF’s European department, Michael Deppler, painted a darker outlook for the eurozone in a presentation to the bloc’s finance ministers on Monday in Brussels, EU Economic Affairs Commissioner Joaquin Almunia said.

“According to him, growth in the euro area could be around 2.0 percent, even below 2.0 percent, slightly below 2.0 percent next year,” Almunia told journalists after the meeting.

In October, the IMF had forecast that the eurozone economy would expand by 2.1 percent next year.

Almunia also said that had the European Commission known what it knows now when it estimated in November that the eurozone economy would grow 2.2 percent then “our forecasts would have a lower figure for growth.” In particular, he cited record oil prices, a slowing US economy, finance market turbulence and a strong euro as sources of increased pessimism.