IMF: Strong Greek 2015 Growth

The six-month report, released on Tuesday, notes that the Greek economy was projected to grow by 0.6% in 2014 and by 2.9% in 2015, while unemployment was expected to fall to 26.3% this year and to 24.4% in 2015. The IMF, however, expects low inflation rates to continue in the country, with the inflation rate at 0.4% in 2014 and 0.3% in 2015.

The IMF said it expected inflation rates in the Eurozone to fall far below goals set by the European Central Bank and asked for "bolder action" on the matter.

Olivier Blanchard, head of economic research in the IMF, presenting the report said that the German economy will be stronger than expected, with a growth rate of 1.7 pct this year and noted that for the first time in the last two years, problematic economies in the European south will have a "low, but stable growth rate". He noted that austerity measures imposed by some governments with the aim to reduce their spending "have been relaxed" while investors were "less concerned" about the possibility of a default in the these countries. He added that banks were "gradually strengthened".

His opinion about the euro area, notes that the incomplete repair of bank and corporate balance-sheets continues to place a drag on the recovery. Fragmentation between periphery and core countries persists, as accommodative monetary conditions have not translated into the flow of credit needed to support a stronger recovery, particularly for smaller companies. Thus, further efforts must be made to strengthen bank balance sheets, through the European comprehensive bank assessment and follow-up, and to tackle the corporate debt overhang.

Blanchard stressed that there were still risks for the global economy and noted that an important risk was the problem of an uneven distribution of wealth.