Global growth disappoints, pace of recovery uneven & country-specific: IMF survey
Updated: Oct 08, 2014 02:23:28pm
New Delhi, Oct 8 (KNN) With the International Monetary Fund (IMF) forecasting global growth at 3.3 per cent in 2014, rising to 3.8 per cent in 2015, its latest World Economic Outlook (WEO) indicates that a weak and uneven global economic recovery continues. However, it reflects different evolutions across various countries and regions.
As far as India is concerned, “growth is expected to increase in the rest of 2014 and 2015, as exports and investment continue to pick up and more than offset the effect of an unfavourable monsoon on agricultural growth earlier in the year,” the WEO report said.
Further, “the postelection recovery of confidence in India also provides an opportunity for that country to embark on its much-needed structural reforms,” it said.
At a global level, the IMF forecasts global growth to average 3.3 per cent in 2014―unchanged from 2013―and to rise to 3.8 per cent in 2015. The weaker than expected growth outlook for 2014 reflects setbacks to economic activity in the advanced economies during the first half of 2014, and a less optimistic outlook for several emerging market economies.
Potential growth rates—that is, the pace at which annual output can expand without pushing up inflation—are also being revised down. “These worse prospects are in turn affecting confidence, demand, and growth today,” says Economic Counsellor and head of the IMF’s Research Department, Olivier Blanchard.
Two underlying forces weigh on global recovery, according to Blanchard. “In advanced economies, the legacies of the pre-crisis boom and the subsequent recession, notably high debt burdens and unemployment, still cast a shadow on the recovery, and low potential growth ahead is a concern.” Several emerging markets are also adjusting to lower potential growth.
Across the globe, investment has been weaker than expected for some time. As a result, “global growth is still mediocre,” he says.
At the same time, Blanchard notes, economic evolution is becoming more differentiated in major countries and regions, with the pace of recovery reflecting various country-specific conditions. (KNN/ES)
As far as India is concerned, “growth is expected to increase in the rest of 2014 and 2015, as exports and investment continue to pick up and more than offset the effect of an unfavourable monsoon on agricultural growth earlier in the year,” the WEO report said.
Further, “the postelection recovery of confidence in India also provides an opportunity for that country to embark on its much-needed structural reforms,” it said.
At a global level, the IMF forecasts global growth to average 3.3 per cent in 2014―unchanged from 2013―and to rise to 3.8 per cent in 2015. The weaker than expected growth outlook for 2014 reflects setbacks to economic activity in the advanced economies during the first half of 2014, and a less optimistic outlook for several emerging market economies.
Potential growth rates—that is, the pace at which annual output can expand without pushing up inflation—are also being revised down. “These worse prospects are in turn affecting confidence, demand, and growth today,” says Economic Counsellor and head of the IMF’s Research Department, Olivier Blanchard.
Two underlying forces weigh on global recovery, according to Blanchard. “In advanced economies, the legacies of the pre-crisis boom and the subsequent recession, notably high debt burdens and unemployment, still cast a shadow on the recovery, and low potential growth ahead is a concern.” Several emerging markets are also adjusting to lower potential growth.
Across the globe, investment has been weaker than expected for some time. As a result, “global growth is still mediocre,” he says.
At the same time, Blanchard notes, economic evolution is becoming more differentiated in major countries and regions, with the pace of recovery reflecting various country-specific conditions. (KNN/ES)
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