Optimism on Eurozone

Photo: The Canadian Press

A tourist shelters from the sun near the Colosseum in Rome.

The International Monetary Fund is more optimistic about the economy of the 19-country eurozone after a run of elections saw populist politicians defeated.

In an update to its April projections published Monday, the IMF revised up its growth forecasts for many eurozone countries, including the big four of Germany, France, Italy and Spain, after stronger than anticipated first quarter figures.

Germany, Europe's biggest economy, is projected to grow by 1.8 per cent, up 0.2 percentage point on the previous estimate, while France is forecast to expand 1.5 per cent, up 0.1 percentage point. Projections for Italy and Spain have been revised higher by a substantial 0.5 percentage point. The two are now expected to grow by 1.3 per cent and 3.1 per cent, respectively. All four are also expected to grow by more than anticipated in 2018.

Overall, the IMF expects the eurozone to expand by 1.9 per cent this year, 0.2 percentage point more than its previous projection. That's just shy of the IMF's 2.1 per cent forecast for the U.S. but slightly ahead of Britain's, whose projected growth rate was revised down by 0.3 percentage point to 1.7 per cent following a weak first quarter that raised concerns about the country's economy ahead of its exit from the European Union.

The IMF's slew of upgrades comes amid rising confidence in the eurozone's outlook following a series of elections that saw populist politicians defeated, most notably in France, where Emmanuel Macron defeated the far-right candidate Marine Le Pen in May's presidential election.