In its latest update projections of the world economy, the IMF predicted the Eurozone economy will contract 0.2% this year, after a slow 0.4% in 2012. Previously, the IMF predicts euro zone economy slowed 0.1% this year.
Even so, the IMF Managing Director Christine Lagarde said she remained optimistic about the economy in 17 countries in the Euro area, as long as they accelerate the pace of change.
The debt crisis began to ease in recent months thanks to the ECB's promise to buy short-term debt from troubled euro zone countries. However, the IMF noted that this has not translated into improved conditions for private sector lending.
UBS Chairman Axel Weber said he believed the euro zone has not been through the worst. Much progress achieved last year driven by market pressures.
"Political risk will come to the surface again, which will haunt the market. As in 2012, a number of unsolved problems in Europe could potentially come back and haunt investors," he said.
Record, Italy will hold elections next month and Germany in September.
However, Lagarde optimistic European conditions improved if the member states agreed to follow the plan in 2012, which took the first steps to establish a banking and fiscal union in the eurozone.
"They need to continue to do so, they need to challenge the conventional wisdom, that when the conditions are right, it is time to relax. This is no time to relax," he said at the World Economic Forum in Davos.
IMF expects global economic growth to reach 3.5% this year, up from 3.2% last year.
For the United States, the IMF stressed that the priority is to avoid excessive fiscal consolidation in the short term, and immediately raise the debt limit, as well as approve the medium-term fiscal consolidation plans are credible, and focuses on the rights and tax reform.
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