ECONOMY

IMF: No need to adjust austerity targets in Europe’s periphery

Periphery countries in the eurozone do not need to brake their fiscal adjustment unless growth slows significantly, the International Monetary Fund said Tuesday.

Joerg Decressin, the deputy director of the IMF’s research department, said austerity in countries like Portugal has already been less this year than in previous years, while growth is likely to rebound.

These countries are struggling to tame their debts while coming out of a prolonged recession sparked by a sovereign debt crisis across the currency bloc.

“Only if growth were to disappoint in a major way would one have to go and revisit this,” he said about the austerity targets. “But the pace as a whole strikes us now for this year and next year as appropriate.”

The IMF now expects Greece, Italy, Portugal and Spain to all exit recession and start growing from next year.

Ireland, another periphery country, has already been growing, albeit slowly. [Reuters]