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16 Jun 2023
Euro Area: IMF Staff Concluding Statement of the 2023 Mission on Common Policies for Member Countries
The euro area economy has shown remarkable resilience in the aftermath of Russia’s invasion of Ukraine and the largest terms of trade shock in several decades, thanks to a strong policy response. However, economic activity has weakened and inflation—although gradually declining—remains elevated. Monetary policy must continue to tighten to bring inflation to target in a timely manner. Fiscal consolidation should also proceed to ease inflation pressures and rebuild fiscal space. A swift agreement on the reform of the EU economic and fiscal governance framework would support fiscal sustainability over the longer term.
