Eurozone Recovery On Track
The euro fell to its lowest level in almost two weeks on Tuesday, finally feeling the effects of European Central Bankers’ concerned remarks.
The common currency traded at $1.3787 at 6:12 GMT as eurozone policy makers breathed a sigh of relief.
With the euro returning to more manageable levels the region’s recovery will be more likely to pick up speed. The currency’s strength was making it difficult for struggling, southern nations to remain competitive at a time when they most needed to export.
After years of recession and painful austerity cuts, many worried that the eurozone recovery would sputter to a halt if the currency’s strength continued.
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Nevertheless, the region seems to be headed in the right direction, with Germany, the bloc’s largest economy, at the helm. According to The Wall Street Journal, the German Finance Ministry said that the nation’s first quarter results are expected to show strong growth when released next month.
Several factors, including better than expected tax revenue and mild winter weather, contributed to the ministry’s optimistic prediction.
Also on Monday, the International Monetary Fund raised its expectations for Portugal, saying the nation’s economic outlook has improved.
The IMF expects the former bailout country to post 1.2 percent growth in 2014, 0.4 percent higher than the fund’s original estimate. Stronger consumption, more exports and better investments were cited as reasons for the better outlook.
Although the fund’s outlook on Portugal improved, the IMF cautioned that the nation was not completely out of the woods just yet.
Portuguese policymakers will need to continue working to maintain the nation’s competitiveness and bring down public debt in order to continue along the same path.
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