I am puzzled by the International Monetary Fund’s latest growth projections for the eurozone. The forecasts in the World Economic Outlook show a mild recession for the US, with a positive annual growth rate of 0.5 per cent this year and a huge contraction in growth for the eurozone from 2.6 per cent in 2007 to 1.4 per cent.

This is puzzling to me for two reasons. First, what drives the US downturn is an immense property recession in combination with a credit crunch. That is, by and large, not the case in the eurozone despite a number of regional downturns, for example in Spain. Second, the economic news from the eurozone has been persistently better than expected so far and there may be a dynamism at work that is not yet fully understood.