IMF cuts view for world economy to 3.3%
Source: Agencies |
April 17, 2013, Wednesday
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Print Edition
Print Edition
THE International Monetary Fund has lowered its outlook for the world economy this year, predicting that government spending cuts will slow US growth and keep the euro currency alliance in recession.
The global lending body cut its forecast for global growth to 3.3 percent this year, down from its forecast in January of 3.5 percent. It didn't alter its prediction of 4 percent global growth in 2014.
The IMF expects the US economy to expand 1.9 percent this year. That's below its January estimate of 2.1 percent and last year's US growth of 2.2 percent. Still, the IMF says the US economy is improving and should expand 3 percent in 2014. US job growth has accelerated, the housing market is recovering and banks are more willing to lend.
The IMF predicts that the 17-country eurozone will shrink 0.3 percent in 2013 and grow only 1.1 percent in 2014.
The IMF issued its latest World Economic Outlook yesterday in advance of the spring meetings of the IMF and World Bank in Washington later this week. Finance ministers from the G20, a group of developed and large developing countries, will also meet.
Christine Lagarde, the IMF's managing director, said last week that the agenda for the meetings will include how to accelerate growth, create jobs and reform banking rules.
The impact of government spending cuts and tax increases in the US and other countries will also likely be a topic of this week's talks in Washington beginning tomorrow.
Developing countries may raise concerns at the G20 about efforts by the US Federal Reserve and the Bank of Japan to stimulate their economies by buying more government bonds and other assets. Those moves can lower the value of the US dollar and yen, which can make US and Japanese exports cheaper overseas. That prospect has raised fears other countries will take similar steps.
The IMF said worries about so-called "currency wars" are "overblown." The world's major currencies aren't excessively undervalued or overvalued, the IMF said in its report.
The developing nations may show the strongest growth over the next two years, according to the IMF forecasts. China may grow 8 percent this year and 8.2 percent in 2014. In its previous forecast, the IMF had predicted 8.1 percent Chinese growth this year and 8.5 percent in 2014.
India may grow 5.7 percent this year and 6.2 percent in 2014, according to the IMF.
The global lending body cut its forecast for global growth to 3.3 percent this year, down from its forecast in January of 3.5 percent. It didn't alter its prediction of 4 percent global growth in 2014.
The IMF expects the US economy to expand 1.9 percent this year. That's below its January estimate of 2.1 percent and last year's US growth of 2.2 percent. Still, the IMF says the US economy is improving and should expand 3 percent in 2014. US job growth has accelerated, the housing market is recovering and banks are more willing to lend.
The IMF predicts that the 17-country eurozone will shrink 0.3 percent in 2013 and grow only 1.1 percent in 2014.
The IMF issued its latest World Economic Outlook yesterday in advance of the spring meetings of the IMF and World Bank in Washington later this week. Finance ministers from the G20, a group of developed and large developing countries, will also meet.
Christine Lagarde, the IMF's managing director, said last week that the agenda for the meetings will include how to accelerate growth, create jobs and reform banking rules.
The impact of government spending cuts and tax increases in the US and other countries will also likely be a topic of this week's talks in Washington beginning tomorrow.
Developing countries may raise concerns at the G20 about efforts by the US Federal Reserve and the Bank of Japan to stimulate their economies by buying more government bonds and other assets. Those moves can lower the value of the US dollar and yen, which can make US and Japanese exports cheaper overseas. That prospect has raised fears other countries will take similar steps.
The IMF said worries about so-called "currency wars" are "overblown." The world's major currencies aren't excessively undervalued or overvalued, the IMF said in its report.
The developing nations may show the strongest growth over the next two years, according to the IMF forecasts. China may grow 8 percent this year and 8.2 percent in 2014. In its previous forecast, the IMF had predicted 8.1 percent Chinese growth this year and 8.5 percent in 2014.
India may grow 5.7 percent this year and 6.2 percent in 2014, according to the IMF.
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