IMF’s growth warning as Brexit fallout spreads

Uncertainties caused by Britain’s vote to leave the EU will cause eurozone economic growth to decelerate to 1.4% in 2017 from 1.6% this year, and downside risks are piling up, the International Monetary Fund (IMF) said yesterday.

In its annual policy review of the 19-country bloc, the IMF said a further global growth slowdown could derail the eurozone’s domestic demand-led recovery, and further Brexit spillovers, the refugee surge, increased security concerns, and banking weakness all could take their toll on growth.

However, IMF European department deputy director Mahmood Pradhan said if the separation negotiations drag out between the EU and the UK and continues to cause risk reductions in financial markets, eurozone growth would slow further.