According to the International Monetary Fund, United Kingdom’s resolve to quit the European Union would affect the growth of euro zone. On Friday, the IMF lowered the growth projection for the Euro zone despite the region’s recent recovery in view of dropped oil pricing and adaptive monetary strategy and policy. As per the report released by the IMF, the Euro zone’s GDP figure is likely to drop from 1.6 % in 2016 to 1.4% next year.
The International Monetary Fund also issued a warning suggesting that the inflation figures would also remain extremely low. The organization also pointed towards the fact that the inflation rate is likely to go up from 0.2 % in 2016 t0 1.1 % in 2017, in view of the increasing prices of energy. The IMF also noted that another slowdown would impact demand domestically and may heighten the concerns around security, thereby hindering growth and progress around reforms as well as policies.
The global financial organization also clarified that the slowdown would weaken the banks and financial sectors in a couple of nations. The IMF further indicated that the Euro Zone may have to deal with increasing unemployment rates and higher private and public debt. This would have a negative impact on the overall productivity and growth of the Euro zone.