The International Monetary Fund said the euro area’s economic recovery “has gained momentum” while it warned that some of the region’s high-debt countries may face difficulties when monetary policy accommodation is reduced.
“The euro area recovery is strengthening and becoming more broad-based,” the IMF said in a statement Thursday following its regular consultations with the 19-nation region. “There should be a renewed commitment to completing the banking union, advancing the capital markets union and creating a common fiscal capacity.”
Still, the Washington-based fund cautioned that “inflation expectations, however, remain subdued, with core inflation at undesirably low levels.” It said countries already operating at capacity should accept inflation above 2 percent “for a prolonged period.”
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