IMF warns of deflation risk in eurozone
July 15 , 2014
The IMF has warned that the recovery of the eurozone is weak and its financial markets are too fragmented. There is a risk of the region entering deflation, it said, urging members to take steps such as repairing bank balance sheets and boosting reforms to increase employment.
In its report the IMF said that the weakness in balance sheets of banks and “uncertainty about their quality” are adding to fragmentation and constraining the “ability and willingness” of banks to shore up credit and investment.