Economy World

European Economy: IMF pessimistic

Forecasts for economic development of Europe are quite pessimistic, causing increasing risks for the global economy, said David Lipton, deputy head of International Monetary Fund (IMF), visiting Hong Kong on Monday.

“The stakes are enormous. If no serious effort is undertaken, Europe could” go into a spin, “which will lead to a drop in confidence, economic stagnation and layoffs,” said Mr. Lipton.

The IMF is considering in this context to revise downward its forecast for global economic growth for 2012, the official reported without specifying numbers.

According to Lipton, the instability of Europe, which spreads through the financial mechanisms, could harm the economy of Asia. “The sale of assets by European banks will cause a fluctuation in share prices in several Asian countries,” he said.

The head of the Bank of Japan Masaaki Shirakawa said earlier in the day that the financial crisis in the euro zone was a big risk for the Japanese economy. The Minister of Finance Jun Azumi for his part called on European states to take urgent and effective measures to improve the economic situation in the region.

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