Europe’s economy poised to fall further behind US, IMF warns

The gap between European and US gross domestic product is set to widen further by the end of the decade, the IMF warned on Thursday, as it sounded an alarm about the continent’s “lack of business dynamism”. The IMF said in its latest economic outlook for Europe that an ageing workforce and low productivity growth would reduce the continent’s annual GDP growth rate for the 10 years until 2029 to just 1.45%.

In the US, the average growth rate over the same period is estimated at 2.29%. US growth has outpaced Europe’s since the global financial crisis, particularly since the Covid-19 pandemic.



Alfred Kammer, director of the IMF’s Europe department, said the continent had “fundamental” problems that went back decades, stressing that GDP per worker, adjusted for purchasing power, was the same in the US, Germany, France, Italy and Spain at the turn of the millennium..