DUSHANBE, July 11, 2013, Asia-Plus – The International Monetary Fund (IMF) has predicted slower global growth until the end of 2014 as Europe’s recession drags on and economic growth slows in key BRIC (Brazil, India, China, and Russia) countries.
The IMF says in an update to its World Economic Outlook (WEO) that the global economy is growing more slowly than expected, with risks to that growth increasing especially in emerging markets.
The IMF cut its expectation for global economic growth in the current year from 3.3 percent to 3.1 percent, and from 4.0 to 3.8 in 2014, a downward revision of ¼ percentage point each year compared with the forecasts in the April 2013 WEO.
Global growth increased only slightly in the first quarter of 2013, instead of accelerating further as expected at the time of the April 2013 WEO. The underperformance was due to continuing growth disappointments in major emerging market economies, a deeper recession in the euro area, and a slower U.S. expansion than expected. By contrast, growth was stronger than expected in Japan.
Growth in emerging market and developing economies is expected to moderate to 5 percent in 2013 and about 5½ percent in 2014, some ¼ percentage point lower than projected in the April 2013 WEO.
Among developing countries, China and Brazil’s growth forecasts were both downsized. China’s 2014 numbers sank 0.6 percentage points and Brazil”s 0.8 points.
The economic forecast for Central and Eastern European countries remain unchanged, at 2.2 percent growth in 2013 and 2.8 in 2014.
Russia’s projected economic growth rate was lowered 0.9 percentage points this year — from 3.4 to 2.5 percent — and 0.5 percentage points in 2014 — from 3.8 to 3.3 percent.
CIS states, not including Russia, had an unchanged forecast for this year and a drop of 0.3 percent in 2014, to 4.3 percent.
The IMF also revised its forecast for the eurozone, which was previously expected to contract by 0.4 percent this year and now seems set to drop 0.6 percent.
Weaker growth prospects in emerging markets and new risks worldwide are challenging global growth, employment, and rebalancing. The report underscores the need for policymakers everywhere to increase efforts to address these challenges and restore robust growth.
