IMF fears possible Italy ‘contagion’ to weaker European economies

COPENHAGEN, Nov 11. The International Monetary Fund (IMF) said Thursday it feared the consequences of a possible “contagion” of Italy’s economic woes to European countries with “weaker macroeconomic fundamentals.”

Noting the “four-year high” in Italian sovereign bond yields, the IMF said “spillovers to other markets have been fairly contained”.

“But there is appreciable uncertainty, and contagion from future stress could be notable, especially for economies with weaker macroeconomic fundamentals and limited policy buffers,” it said in its autumn forecast for Europe.