Michael Deppler, director of the International Monetary Fund (IMF) said Tuesday in a teleconference that the euro's decline from above 1.30 dollars to around 1.23 dollars currently was "helpful" for eurozone growth.

"We have long thought that a long-term rate of 1.20 to 1.30 dollars for the euro was about right in the long-term equilibrium sense," he said.

"The longer-term developments are not buoyant, but they're certainly not things to be as negative about as seems to be the prevailing mood in Europe today," he said, noting that GDP was picking up last year with by 2 percent, with domestic demand started accelerating.

"All the indicators are that even though GDP was relatively strong in the first quarter--about 2 percent at annual rates--it will be about half that in the second quarter to judge from the indicators and in any case," he added.

"The fundamentals for the recovery remain in place, and we expect it to resume," he said.

He noted that there's a need for more vigor in the strategy and all the usual elements need to be reinforced going forward, such as fiscal consolidation, labor market reforms, particularly on the entitlements and the regulatory side, and reforms essentially to strengthen competition and get productivity moving.

To the question if it's necessary for the European Central Bank (ECB) to cut rates to foster growth in Europe, Deppler answered there's no need to cut rate before situation gets clarified.

IMF experts also said in a statement that the eurozone was likely to gather momentum in the second half of the year after the present slowdown.

"The situation is uncertain, with the indicators pointing to softening activity, but the fundamental elements for a continuation of the gradual recovery seem to remain in place," said the statement.

"With inflation headed for rates well below 2.0 percent, a cut in interest rates would be appropriate if the weakening became more pervasive or the euro appreciated sharply on a multilateral basis," it added.

Source: Xinhua