IMF warns of risks to global growth
Print Edition
THE global economy is strengthening but faces threats from super-low inflation and outflows of capital from emerging economies, the International Monetary Fund warned yesterday.
The lending organization expects the global economy to grow 3.6 percent this year and 3.9 percent in 2015, up from 3 percent last year. Those figures are just one-tenth of a percentage point below the IMF’s previous forecasts in January.
The acceleration is being driven mostly by strong growth in advanced economies, including the United States and the United Kingdom, and a modest recovery in the 18 nations that use the euro currency.
By contrast, developing nations, particularly Russia, Brazil and South Africa, are now expected to grow much more slowly than the IMF forecast three months ago.
The IMF, in its World Economic Outlook report, sharply upgraded its growth forecasts for the UK, Germany and Spain. It expects the eurozone to grow 1.2 percent in 2014 and 1.5 percent in 2015 after shrinking 0.5 percent last year. Both estimates are one-tenth of a percentage point higher than the IMF’s January forecasts.
It made no changes to its forecasts for US growth, which it estimates at 2.8 percent this year and 3 percent in 2015.
“The recovery ... is becoming not only stronger but broader,” said Olivier Blanchard, the IMF’s chief economist.
Japan, however, is forecast to expand just 1.4 percent next year, down from the IMF’s previous projection of 1.7 percent, and just 1 percent in 2015. Higher sales taxes are expected to weigh on growth.
Growth in China, the world’s second-largest economy, is expected to continue its slowdown from its double-digit pace of a few years ago. That will have repercussions for many nations that export raw materials and parts to Chinese factories. China is projected to expand 7.5 percent in 2014 and 7.3 percent in 2015, down from 7.7 percent last year.
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