"The good news is that the European economy is recovering from the crisis, Lagarde said in
But the region still faces high unemployment and public debt, IMF chief noted.
"There is the danger of a vicious cycle: persistently high unemployment and high debt-to-GDP ratios jeopardize investment and lower future growth," she added.
Earlier this week, the lender urged Eurozone policymakers to address deep-seated obstacles to growth to ensure a strong and durable recovery.
The lender said the economy is gradually recovering, but it is turning out to be weaker than expected.
Further, the lender commented that policymakers should not reach for budget cuts if growth slips below expectations. The IMF report argued that it will be difficult for growth to take-off in a sustainable manner until structural barriers are reduced.
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