Stagnation ahead!

In a sobering analysis of the crisis-ridden euro-zone, the International Monetary Fund has said that the region is beset by a collapse in bank lending even as unemployment continues to rise and signs of recovery remain “elusive”. The IMF portrayed the group of countries as at a “high risk of stagnation,” with few short-term options for turning their economies around. The analysis, released recently, shows euro-zone unemployment rising for at least another year, to 12.4% regionwide in 2014. The IMF expects euro region gross domestic product to increase 0.3 percentage points in the final quarter of the year compared with 2012. For 2014 as a whole, growth of 0.9% is forecast. The combined debt of households, companies and governments is constraining them from borrowing to buy or invest. Banks, stung by losses on government bonds in places like Greece, have retreated behind national borders and remain hesitant to lend to one another or take risks in other nations.