«« Greece fears hit stocks; IMF seen cutting growth outlook ‘significantly’
Greece growth projections will need to be “significantly” revised down, the European head of the International Monetary Fund (IMF) told CNBC on Friday, as fears of a default weighed on European and U.S. stock and bond markets.
The IMF estimated on Tuesday that Greece’s economy would grow by 2.5 percent this year and 3.7 percent in 2016—forecasts that bemused some analysts aware of the country’s hefty debt burden and deadlocked talk with international creditors.
On Friday, Poul Thomsen, director of the IMF’s European department, admitted the forecasts were unrealistic.
“Our growth projection for this year will clearly have to be revised down significantly because of the current turmoil, because of the delay in completing the review. So once again, growth will under perform,” Thomsen told CNBC from the IMF’s annual Spring Meeting in Washington D.C.
Stocks and bonds were hit across Europe and in the U.S. on Friday, with Greece fears factoring in the slump. The country is seen as increasingly likely to default on its debt obligations, as negotiations with its international bailout supervisors have failed to succeed in bringing about a further tranche of aid.
Greece’s finance minister, Yanis Varoufakis, is currently in meetings with U.S. and IMF officials in Washington that could determine the country’s economic future. The IMF is Greece’s key creditor. »»