IMF Staff Country Reports

Euro Area Policies: 2023 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Euro Area; IMF Country Report No. 23/264

Publication Date:

July 19, 2023

Electronic Access:

Free Download. Use the free Adobe Acrobat Reader to view this PDF file

Summary:

The euro area economy has shown resilience in the aftermath of Russia’s invasion of Ukraine and the largest terms of trade loss in several decades, reflecting strong policy efforts to secure gas supplies and cushion disposable incomes. Nonetheless, activity has weakened, with the economy slipping into a mild technical recession in early 2023, and inflation is far above target. While headline inflation has started to decline with the easing of supply bottlenecks and energy prices, core inflation is proving more persistent. Euro area banks are well capitalized and liquid overall, but the rapid tightening of monetary policy after a prolonged period of accommodation can expose pockets of weakness in the financial system, including in the nonbank sector.

Series:

Country Report No. 2023/264

Subject:

Energy prices Fiscal policy Fiscal stance Inflation International organization Monetary policy Monetary tightening Prices

Frequency:

regular