IMF To Cut Eurozone Growth Forecast

The International Monetary Fund could be about to cut growth forecasts for the euro area as concerns over the omicron Covid variant and persistently higher inflation grow.

The Fund said in October that it expected the euro zone economy to grow by 4.3% in 2022. Now, the institution has warned about the “possibility of modest revisions” when it presents new estimates next month.

“We may have a very modest downgrade in the cards for the euro zone,” IMF Managing Director Kristalina Georgieva told CNBC on Monday.

Growing supply pressures, high energy prices and the reintroduction of new social restrictions in some euro area countries are among the top concerns for the Fund. It comes as the newly identified omicron Covid variant is reported in an increasing number of countries around the world. The pandemic remains the number one risk to economic growth, according to the IMF.

“We have been screaming from the top of a mountain that [the] pandemic is the greatest risk to global economy. And we have been advocating very strongly to vaccinate the world. Progress is made, not enough,” Georgieva said.