The International Monetary Fund will revise its quarterly outlook over “Brexit” and the growth projections for both the U.K. and the euro area are likely to be lowered, the IMF Chief Economist Maurice Obstfeld said in an interview to the Italian daily Corriere della Sera.
In the interview published Friday, Obstfeld said, “the result [of the revision] will not be positive.”
“It is difficult to understand the size, there is lot of uncertainty,” he added.
The global lender is set to publish an update to its World Economic Outlook on July 19 in Washington.
Regarding the possibility of other EU members wanting to leave the union, Obstfeld warned that such a process will be more expensive for them as they will also have to renounce a single currency.
Asked about the Italian government’s reliance on tax measures and bonus to boost demand, the economist pointed out that it is difficult as the country already has a somewhat “expansionary fiscal policy”.
And given Italy’s high debt level, there is no budgetary space to do so, until the tax base is expanded, he added.
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