IMF lowers global forecast over likely temporary setback in US
Print Edition
THE International Monetary Fund lowered its 2015 global economic growth forecast yesterday, citing a likely “temporary setback” from the United States in the first months of the year.
The IMF also highlighted the risk of “financial stress” in Europe from the Greek debt crisis and China’s slowdown, but left forecasts for the eurozone and the Asian giant unchanged.
The Washington-based institution projected the world economy would grow 3.3 percent this year, less than the 3.5 percent pace it had forecast in April and slightly slower than 2014.
The 2016 forecast was for a pickup to 3.8 percent.
“Moderate growth continues, with an improving recovery in advanced economies, and a slowdown in underlying growth in emerging-market and low-income developing economies,” Olivier Blanchard, the IMF’s chief economist, said at a news conference.
According to the IMF, the downgrade of the global growth forecast largely reflects the contraction in the US economy in the first quarter amid severe winter weather, which spilled over to neighboring Canada and Mexico.
“The unexpected weakness in North America, which accounts for the lion’s share of the growth forecast revision in advanced economies, is likely to prove a temporary setback,” it said.
Because of the setback, the IMF lowered its forecast for the United States, the world’s largest economy, by 0.6 percentage points to 2.5 percent. Canada’s forecast was cut by 0.7 points to 1.5 percent, and Mexico’s by 0.6 points to 2.4 percent.
Blanchard said the US economy’s soft first quarter, a 0.2 percent contraction, turned out to not be a sign of underlying weakness “now that the fog has largely cleared.”
“Fundamentals are still solid, and the US recovery is on track,” he said.
Effect of Greek crisis marginal
Greece’s debt crisis, which could force it to abandon the euro, for the moment only was having a marginal effect on the expansion of the global economy, the IMF said in the update of its World Economic Outlook. The institution left unchanged its forecasts for the eurozone at 1.5 percent, and for the two largest economies: Germany (1.6 percent) and France (1.2 percent).
“Developments in Greece have, so far, not resulted in any significant contagion. Timely policy action should help to manage such risks if they were to materialize,” it said, noting the recovery in the eurozone seemed “broadly on track.”
But the recent rise in interest rates on the sovereign bonds in some euro-area economies could signal larger problems ahead. “Some risks of a re-emergence of financial stress remain,” it said.
The 188-nation IMF also left unchanged its forecast for China (6.8 percent) despite the turbulence in its capital markets.
“The puncture of what had clearly become a stock market bubble may have some limited effect on spending. But, for the moment, the slowdown in growth is primarily led by a slowdown in real estate investment, a development we see as basically desirable,” Blanchard said.
“There is no particular reason to have lost confidence” in China’s economy because of the bursting bubble, he added.
Japan, the world’s No. 3 economy, had some drag from sluggish consumption and wage growth, the IMF said, lowering its forecast by 0.2 percentage points to 0.8 percent. The contraction in Brazil, Latin America’s largest economy, would be worse than previously thought — IMF expects the economy to shrink by 1.5 percent this year.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
