Gradual upturn in global growth during 2013 - IMF

Thursday, 24 January 2013 01:30 - - {{hitsCtrl.values.hits}}

The International Monetary Fund (IMF) said yesterday global growth is projected to increase during 2013, as the factors underlying soft global activity are expected to subside.

World output is forecast to grow by 3.5%, up from 3.2% in 2012 and estimate for 2014 is 4.1%

However, this upturn is projected to be more gradual than in the October 2012 World Economic Outlook (WEO) projections of the IMF.

Emerging market and developing economies to grow by 5.5% in 2013 and by 5.9% next year, up from 5.1% in 2012.

Forecast for developing Asia’s is 7.1% in 2013 and 7.5% next year, up from 6.6% last year.

“Policy actions have lowered acute crisis risks in the euro area and the United States. But in the euro area, the return to recovery after a protracted contraction is delayed,” it added.

While Japan has slid into recession, stimulus is expected to boost growth in the near term. At the same time, policies have supported a modest growth pickup in some emerging market economies, although others continue to struggle with weak external demand and domestic bottlenecks. If crisis risks do not materialize and financial conditions continue to improve, global growth could be stronger than projected. However, downside risks remain significant, including renewed setbacks in the euro area and risks of excessive near-term fiscal consolidation in the United States. Policy action must urgently address these risks.

IMF also said economic conditions improved modestly in the third quarter of 2012, with global growth increasing to about 3 percent. The main sources of acceleration were emerging market economies, where activity picked up broadly as expected, and the United States, where growth surprised on the upside.