Thursday July 30, 06:01 PM
IMF sees 'modest recovery' starting in eurozone in 2010
BRUSSELS (AFP) - The eurozone economy can expect a "modest recovery" in the first half of next year despite a lingering risk of deflation, the International Monetary Fund said Thursday.
"The recovery is likely to be slow and subject to considerable risks. The decline in activity should moderate through the remainder of 2009 and give way to a modest recovery starting in the first half of 2010," a report said.
It said that IMF "staff saw a small risk of sustained deflation", despite the opinion of the European Central Bank that the inflation outlook in the 16 nations using the euro single currency remains broadly balanced.
The IMF confirmed a forecast from July 8 that eurozone gross domestic product would shrink 4.8 percent this year and 0.3 percent in 2010.
The European Commission forecast in January that the eurozone economy would contract 1.9 percent for the whole of 2009 before eking out growth of 0.5 percent next year.
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