BREAKING: IMF cuts global growth forecasts and warns of weakness in Eurozone

LAST UPDATED: 7 Oct, 2014 @ 16:32
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BREAKING: IMF cuts global growth forecasts and warns of weakness in Eurozone

EUROZONE countries have been warned of weaker economic growth, as the International Monetary Fund cuts its global growth forecasts for the third time this year.

The IMF has cut predicted Eurozone growth forecasts to 0.8% for 2014 and 1.3% in 2015, down sharply from 1.1% for this year and 1.5% for next.

It also warned that the 18-nation single currency bloc is facing a long period of sluggish activity and low inflation.

Worldwide, the Washington-based body also cut its expectations for global growth to 3.3% this year, and 3.8% next, down from 3.4% and 4.0% respectively.

“There is a risk that the recovery in the euro area could stall, that demand could weaken further, and that low inflation could turn into deflation,” said Olivier Blanchard, the IMF’s chief economist.

“Should such a scenario play out, it would be the major issue confronting the world economy.”

The IMF has consistently overestimated how quickly richer countries would be able to free themselves from high debt and unemployment following the global financial crisis.

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