Euro area growth to stay tepid through 2027, inflation to persist: IMF
The Executive Board of the International Monetary Fund (IMF) has concluded its 2025 consultations on euro area policies, urging member countries to adopt a comprehensive strategy to bolster growth and financial resilience. The annual review also incorporated findings from the Financial Sector Assessment Programme (FSAP), which assessed the region's financial stability and regulatory framework.
Euro area growth is expected to remain moderate through 2025â€'2027 due to trade tensions, weak sentiment, and geopolitical uncertainty, according to IMF. While inflation is projected near target, risks remain two-sided. The IMF has urged for structural reforms, deeper market integration, and fiscal reorientation. It also highlighted financial stability risks from non-bank linkages.
Headline inflation is expected to stay around target from mid-2025, with core inflation anticipated to reach 2 per cent by 2026. However, the IMF warned of downside risks to growth, with inflation risks remaining two-sided. It cited potential trade policy shifts, escalating tariffs, and geopolitical shocks as key threats to demand and price stability, IMF said in a press release.
Meanwhile, wage pressures, euro appreciation, and declining non-energy goods prices could pull inflation below projections.
To counter the increasingly complex global backdrop, the IMF called for decisive reforms at the EU level, including steps to deepen the single market, improve energy security, and reorient the EU budget towards common public goods. It also stressed the need to maintain debt sustainability and secure financial and price stability.
The FSAP findings revealed that the euro area's banking system remains well-capitalised and liquid under current conditions, although some banks could breach capital buffers under stress scenarios. The IMF identified rising risks from interlinkages with non-bank financial institutions and recommended enhanced data sharing, better systemic risk oversight, and comprehensive stress testing.
Further FSAP recommendations included full implementation of the Basel III capital standards, establishment of a common deposit insurance system, more flexible bail-in rules, and stronger resolution liquidity frameworks, added the release.
The IMF welcomed progress in banking supervision and anti-money laundering efforts, but noted persistent fragmentation remains a key obstacle to a more resilient and integrated euro area financial system.
Fibre2Fashion News Desk (SG)
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
United News of India
3 hours ago
- United News of India
Russian President Vladmir Putin holds discussion with top govt brass, aides, ahead of Alaska summit
Moscow, Aug 14 (UNI) Russian President Vladmir Putin, ahead of his meeting with US President Donald Trump on Friday in Alaska, held discussions with the top brass of his administration and other top government aides, said Kremlin spokesperson Dmitry Peskov. According to RIA Novosti, the meeting was attended by members of the delegation to the upcoming summit: Foreign Minister Sergey Lavrov, Defence Minister Andrei Belousov, head of the Russian Direct Investment Fund Kirill Dmitriev, Finance Minister Anton Siluanov, and presidential aide Yuri Ushakov. Addressing the attendees, Putin said that he wanted to brief all in the meeting about the peace agreements reached with Washington so far, and would announce further updates post his meeting with Trump, adding that the US President's government 'is making vigorous efforts to end the fighting.' Describing the ending of the war as being necessary for creating 'conditions of long-lasting peace' between Moscow, Washington, and the EU, the Russian President did not rule out negotiations regarding control over strategic offensive weapons with the US, in the future round of talks. Peskov further told reporters that both leaders 'are ready to talk and will discuss the most difficult issues," to create a framework for reaching mutual agreements and understandings on a variety of different issues, as both Moscow and Washington are working to better their bilateral ties. He took a dig at Europe during his briefing and said 'Such mutual political will is in short supply now. We see that we probably will not get an adequate response, for example, from the Europeans," in a reference to the EU's open declaration of continued support for Ukraine, including the bloc's desire for greater militarisation. UNI ANV SSP
Time of India
4 hours ago
- Time of India
Discounts dip but Russian crude keeps flowing
Representative AI image Representative AI image Representative AI image 1 2 NEW DELHI: The flow of Russian crude to India remains unabated in spite of discounts shrinking to $1.5-2 per barrel as market factors and input requirement continue to drive refiners' choice in the absence of any govt directive for or against those imports amid US and European Union (EU) pressure. 'We are buying crude as per the economics. We are not making any extra effort for either increasing or decreasing Russian crude (purchase)," IndianOil chairman Arvinder Singh Sahney said on Thursday. Coming from the head of India's largest state-run refiner and a major buyer of Russian crude, the statement can be construed as an indication the govt remains undaunted by western pressure against purchase of those barrels. Govt sources said a team of officials from the external and commerce ministries is set to visit Russia for further discussion on a Rupee-Rouble trade, something both countries have been pursuing for years. Several cargoes of Russian crude was delivered to western ports last week, contrary to foreign media reports of India pausing purchase of Russian oil. Describing those reports as 'wrong', Sahney pointed out that Russian oil was not sanctioned like Iranian or Venezuelan crude but is only subject to a price cap. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like This year's most comfortable shoes are a hit with the over-40 crowd Ultra-Comfortable Shoes Undo He said the US had set the price cap at $60/barrel, among other curbs, after Russia's invasion of Ukraine in 2022. The EU's latest curbs has lowered the cap to $47 (at current oil prices). There is no curb on buying Russian oil within these conditions. Sahney said buying (clean) Russian oil even at small discounts could make sense for refiners if the yield patten of that particular grade suits the production plan at a given point. 'If the pricing and characteristics of the crude suits our scheme of processing, we buy,' he said explaining the monthly variations in the quantity of imports from Russia or the US. Separately, executives of other refining companies said the wind-down provisions in the US penalty on New Delhi allow import of Russian crude loaded upto seven days from the order, after which the 25% additional tariff will be imposed on Indian goods exports. 'We will continue to import Russian oil but will not violate the sanctions,' an executive of major refining company said requesting that neither he nor his company be identified.
Economic Times
4 hours ago
- Economic Times
Trade talks with US going on: Commerce Secretary
India and the US are actively pursuing a bilateral trade agreement. The next round of talks depends on the US-Russia meeting. A 25% tariff on Indian goods is in effect. India will discuss rupee trade with Russia. Trade with China is growing. India is expediting FTAs with the EU and Latin America. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads India is "fully engaged" with the US for a bilateral trade deal, but the status of an American delegation visiting India for the next round of talks will be known closer to the scheduled date of August 25, a top official on the issue is expected after a crucial meeting between US President Donald Trump and Russian President Vladimir Putin in Alaska on Friday to discuss the Ukraine conflict."Close to the date, we will be able to know how the talks will be," commerce secretary Sunil Barthwal said on end date for the first tranche of the proposed bilateral trade agreement (BTA) remains the fall of 2025, which is September or October this year, he underlined. So far, five rounds of BTA talks have been said negotiations are continuing between the two countries on several levels including ministerial, diplomatic and through the negotiating team. This comes amid the US imposing a 25% reciprocal tariff on Indian goods from August 7 and another 25% tariff as a penalty for buying oil and arms from Russia from August 27."The additional tariff depends on how geopolitics unfolds over the next 21 days," an official said, adding that it is too early to speculate on how it will pan out. "If conditions are favourable for India, the US may not impose additional duties," the official said referring to the Trump-Putin US remains India's largest trading partner and the commerce and industry ministry is in touch with exporters and export promotion councils to assess the impact of the 25% tariff already in inter-ministerial committees have also been set up to understand the sectoral impact of the tariffs. State governments are also looking at how they can facilitate said there does not seem to be a significant impact or front-loading of exports to the US between April and per official data, India's exports to the US were $33.53 billion in April-July FY26, which is 17.8% higher than $27.57 billion in April-July exports to the US in July were $8.01 billion as against $8.3 billion in June and $6.68 billion in July 2024.A high-level Indian delegation to Russia next week will discuss ways to put in place a rupee-denominated trade mechanism, officials said.A team of officials from the commerce and industry ministry is expected to be a part of the delegation accompanying external affairs minister S Jaishankar on his visit to said India's trade with China has been growing positively, with both imports and exports Delhi is also in touch with Beijing to address disruptions in rare earth magnet imports from China, and to ensure that supplies are restored, they goods exports to China were $5.76 billion between April and July 2025 against $4.8 billion a year government is intensifying efforts to fast-track free trade agreements (FTAs) with the European Union (EU) and some Latin American countries. It has also asked the United Kingdom (UK) to expedite the process of ratification of the India-UK trade pact so that it comes into force soon.
