The IMF calls for more fiscal stimulus in the euro zone in 2021-22

Wednesday, April 14, 2021 - 19:15
Point Trader Group
The IMF calls for more fiscal stimulus in the euro zone in 2021-22

The International Monetary Fund said that the eurozone countries should provide additional financial stimulus of 3% of GDP in 2021-2022 to support economic growth equivalent to 2% of output by the end of next year and limit the negative repercussions of the pandemic.

In its forecast for the euro zone, the IMF said that additional fiscal consolidation could be followed with more discipline once the untapped capacity is reduced.

He added that this fiscal stimulus "will yield greater benefits to low-income families and will have fewer side effects than an increase in monetary stimulus."

And inflation will approach the target in many countries and help rebuild the monetary policy space.

The eurozone countries provided financial stimulus and programs to pump liquidity of more than three trillion euros last year in order not to stop the wheel of their economies and there are some countries, such as Italy, which announced new support measures in light of the closures facing the third wave of the pandemic.

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