Structural reforms are “beginning to unleash results”, said Christine Lagarde, the managing director of the International Monetary Fund, which hosted a weekend of meetings with the World Bank starting on Friday (11 April).
The IMF predicted last week that the eurozone economy would grow by 1.2% in 2014 and 1.5% in 2015. This is more conservative than the European Commission’s estimate in February that the eurozone would grow by 1.8% in 2015.
The finance ministers of European Union member states carried with them a message that had been agreed during an informal meeting earlier in the month: “The EU recovery that started in the first quarter of 2013 continues.”
That message was echoed by Siim Kallas, the European commissioner for transport, who is standing in for Olli Rehn, the European commissioner for economic and monetary affairs. Rehn has taken leave from the Commission to campaign in the European Parliament elections.
Yet potential downside risks were never far from the minds of policymakers. Lagarde described the eurozone’s recovery as “fragile”, and stressed that the EU needs to complete its banking union project – a plan to place all eurozone and some non-eurozone banks under a single regulatory system.
Low inflation was also singled out by the IMF as a “key risk” both to the eurozone and to growth across the world. The IMF estimated that the world economy would grow by 3.6% in 2014 and 3.9% in 2015, a slight downgrade from estimates in January.