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Eurozone crisis threatens global economy: IMF

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The International Monetary Fund (IMF) has warned that the debt crisis in the eurozone is threatening the economic growth around the world.

“The euro area continues to pose a large downside risk to the global outlook,” the IMF said on Wednesday.

“In particular, risks of prolonged stagnation in the euro area as a whole will rise if the momentum for reform is not maintained.”

The IMF predicted that the single currency area would remain in recession in 2013, with the eurozone economies shrinking by 0.2 percent compared to IMF’s projection of October 2012.

The IMF said the heavily debt-ridden countries such as Greece and Spain, where governments are trying to fix large budget deficits, must push through with more fiscal and structural reforms.

Meanwhile, Eurostat, the European Union’s statistics office, said on Wednesday that the global economic growth would increase to 3.5 percent in 2013 mainly by emerging and developing economies.

However, IMF chief economist Olivier Blanchard said global growth was “not enough to make a dent in the unemployment rates” in rich countries.

Europe plunged into financial crisis in early 2008. The worsening debt crisis has forced the EU governments to adopt harsh austerity measures and tough economic reforms, which have triggered incidents of social unrest and massive protests in many European countries.

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