With the Eurozone becoming increasingly constricted by the tightening grip of deflation, coupled with the effects of several other simultaneously poorly-performing global economies, Europe finds itself in a potentially precarious position in 2015.
According to the International Monetary Fund’s (IMF) World Economic Outlook (WEO) report of October 2014, economic recovery in emerging and developing Europe continued to be uneven in the last 18 months. Growth remained strong or accelerating in Hungary and Poland in 2013 and into first half 2014, for example, but slowed in southeastern Europe.
Inflation declined in most economies in the region, reflecting lower food and energy prices, as well as disinflation pressure from the Euro area, particularly for economies that peg their currencies to the euro. Bosnia and Herzegovina, Bulgaria, Croatia, and Montenegro fell into deflation with persistent economic slack, the report explained.
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