IMF: Inflation can hit euro growth

Comment on this story
Christine Lagarde12301 Reuters. International Monetary Fund Managing Director Christine Lagarde speaks during a conference about the future of the Euro zone organized by the Robert Schuman foundation in Paris July 18, 2014. The head of the International Monetary Fund warned on Friday that financial markets were "perhaps too upbeat" because high unemployment and high debt in Europe could drag down investment and hurt future growth prospects.

Paris - IMF chief Christine Lagarde warned on Friday that low inflation could damage growth in Europe and urged the European Central Bank to maintain a flexible policy.

“Obstinately low inflation can seriously undermine growth,” said Lagarde, who recently hinted that the 3.6 percent global growth forecast for 2014 may have to be trimmed.

But the “good news,” Lagarde said, was that “European economies are beginning to emerge from the crisis.”

She said: “We are seeing this in a certain number of indicators. We are also seeing this in the very positive orientation of markets, perhaps a little too positive in respect to fundamentals.” - Sapa-AFP



sign up
 
 

Comment Guidelines



  1. Please read our comment guidelines.
  2. Login and register, if you haven’ t already.
  3. Write your comment in the block below and click (Post As)
  4. Has a comment offended you? Hover your mouse over the comment and wait until a small triangle appears on the right-hand side. Click triangle () and select "Flag as inappropriate". Our moderators will take action if need be.