Euro area's growth projected at 0.9% in 2026,1.2% in 2027: IMF

WAHINGTON, (UrduPoint / Pakistan Point News / WAM - 16th Jul, 2026) Following a period of growth at potential and inflation at target, the Euro area outlook has weakened, the IMF concluded after the Executive board of the International Monetary Fund (IMF) completed the 2026 discussions on common euro area policies with member states.

''The effects of the war in the middle East include weaker confidence, tighter financial conditions, and inflationary pressures. Growth is projected at 0.9% in 2026 and

1.2% in 2027—0.5 and 0.2 percentage points below pre-war estimates—while headline inflation is projected at 2.

9% in 2026 and 2.3% in 2027, it said.

''A carefully calibrated policy response is needed to manage the macroeconomic consequences of the current shock while advancing structural reforms to boost medium-term growth and resilience. The immediate priority is to keep inflation expectations anchored and cushion the impact of the shock within available fiscal space. These efforts should remain consistent with the longstanding structural agenda to strengthen Europe's energy security, economic resilience, and potential growth,'' it recommended.