'Europe set to grow at 2.3% in 2010, but risks remain’

WASHINGTON: Continuing its recovery, the European economy is projected to expand 2.3% this year even as ‘significant risks’ persist, according to the multilateral lender IMF. Ravaged by the 2008-09 financial meltdown, the European economy shrank at a staggering pace of 4.6% last year.

“Europe continues to recover from its deepest recession in the post-war period with GDP projected to expand by 2.3% in 2010 and 2.2% in 2011,” the International Monetary Fund (IMF) said on Wednesday.

The multilateral lender’s Regional Economic Outlook for Europe noted that resurgent global economy is mainly helping the overall recovery in the region. Stressing that recovery is still sluggish, IMF pointed out that ‘significant risks remain’.

“Fiscal consolidation, while inevitable, should be undertaken in a way that minimises the negative impact on growth and unemployment,” the report added.

European economic giant Germany is expected to grow 3.3% in 2010 while France is anticipated to record an expansion of 1.6% this year.

Greece, whose spiralling debt crisis had threatened to hurt the fragile world economic recovery, is projected to contract as much as 4% in 2010.