Brexit fallout will shave eurozone growth in 2016, 2017

The update comes after the eurozone economy expanded by 1.7% previous year, its fastest pace since 2010.

“Given the euro area’s substantial weight in world trade, this slowdown would have spillovers to many other economies, including emerging markets, but the impact is expected to be limited”.

“We certainly hope that all parties, the United Kingdom as well as the European Union players, will decide to reduce and eliminate that uncertainty by giving predictability about the timeline, how long will it take?”

Zhu said that Iraq’s accumulation of large external arrears to global oil companies and domestic arrears in 2015 was “unfortunate” and they should be paid down.

But presenting the IMF’s regular review of the euro area today, Mahmood Pradhan, deputy director of the European department, stressed that the results were an early assessment.

The IMF said recently that Deutsche was the single biggest net contributor of risk to the global financial system among 29 big banks designated as globally significant.

The IMF’s remarks come at a hard time for the European Commission that is trying to get euro zone members to stick to budget deficit rules – which state that deficits must not exceed 3 percent of GDP – while remaining wary of rising anti-EU sentiment and continuing economic pressures on countries still in recovery mode following the financial crisis.

It noted that longer term prospects too are “mediocre”, with legacies from the 2008 financial crisis, including unemployment, high public and private debt and “deep-rooted structural weaknesses” weighing on growth and productivity.

While negative interest rates have helped the euro area economy, further cuts may show diminishing returns, meaning the ECB’s focus should be on its asset purchase program, according to the International Monetary Fund.

Growth is seen expanding by 1.1 percent in 2017, the officials said.

The Fund cautioned that fiscal and monetary policy options to support growth had narrowed, and that political uncertainty would also weigh on economic activity.

MD Christine Lagarde warned in an interview published on Thursday that antitrade policies such as those championed by Republican presidential candidate Donald Trump risked a protectionist movement that could severely damage global growth.