(MENAFN- Trend News Agency) U.S., WASHINGTON, April 19 . Europe needs tofocus on deepening the single market, said Alfred Kammer, Directorof the European Department of the IMF, during a briefing on theRegional Economic Outlook for Europe held as part of the IMF SpringMeetings in Washington, Trend reports.
“IMF forecasting on Europe is in a soft landing, but that is notguaranteed. What we saw was rapid inflation over the last year, andwe are now forecasting a recovery. We are expecting aninvestment-driven recovery. We also see rate cuts ahead, but itwill be more gradual in terms of what we are seeing in achievingthe inflation target in the Euro area,” he said.
Kammer believes that budgetary action is required to meetclimate and other spending needs.
“We look at where Europe is currently with regard to the globalfrontier in terms of output and welfare. When you're looking at theglobal frontier, in terms of GDP per capita and purchasing power,Europe is 1/3 lower than the US, which has not always been thecase. And when we are looking at the explanatory factors where thisis coming from, this comes mainly from lower productivity in Europeversus the US. That means Europe needs to focus on productivity inorder to close this gap with the US,” he noted.
Kammer pointed out that productivity growth will face a lot ofheadwinds and is not able to close this gap in the forecasthorizon.
"Therefore, additional actions are required, and ourrecommendation to Europe is to focus on building out and deepeningthe single market. The single market was a growth booster in the1990s, and there is much to do in terms of further integration. Itis not just capital markets and banking unions; it is borderinfrastructure. When we did the study, the bottom line was toreduce those barriers in the single market by 10 percentage points boost to GDP will be 7 percent in terms of level, and that is alarge number,” he said.
Kammer believes that the deepening of the single market willalso be a response to the more difficult economic environmentbecause Europe is going to build resilience in the single market bydeepening it and making the economy more robust.
The Spring Meetings of the International Monetary Fund and theWorld Bank Group kicked off on April 15.
The main ministerial meetings and events will take place April17-19 with other events and activities taking place during theweek, April 15-20.
At the heart of the gathering are meetings of the jointDevelopment Committee and the IMF's International Monetary andFinancial Committee, which discuss progress on the work of theWorld Bank Group and the IMF.
The Spring Meetings bring together central bankers, ministers offinance and development, parliamentarians, private sectorexecutives, representatives from civil society organizations andacademics to discuss issues of global concern, including the worldeconomic outlook, poverty eradication, economic development, andaid effectiveness.
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