In a sign of pessimism regarding the economic outlook in the medium term, the IMF cut its forecasts 0.3% growth for 2015 and 2016, despite believing that oil cheaper represents “a sudden impulse.”
Although the fund still believes that the world economy is likely to grow 3.5% this year, a figure close to the world average of the past 30 years, hoped there would be a period of much higher growth to recover lost production during the financial and economic crisis of 2008-2009.
The IMF lowered its growth forecast for China by 0.5% next year. This, if true, would its economy growing more slowly than that of India. The fund thinks the economy 6.8% in 2015 and 6.3% in 2016. Official figures for growth in China, published on Tuesday reported a 7.4% growth in 2014 will expand.
Christine Lagarde, head of the IMF described last week forecast global growth as “very low, very fragile and very unbalanced”, while the bottom put the finishing touches to the forecast.
In December, the IMF expected lower oil prices to accelerate global growth rates of 0.3% to 0.8%. The cut in the general forecasts highlights how far the IMF has done more pessimistic.
The updated forecast global economic background, which reviews the main prognostic October, reveals a deep concern that pessimism continue.
The weaker outlook in most countries comes from “a weakness in investment, while adjusting to reduced expectations for growth in the medium term remains in many advanced economies and emerging market, “said the report.
Having incorporated the 55% decline in oil prices since September, an increase in the dollar and these prospects over the medium term weak, the IMF believes that the global economy will grow 3.5% in 2015 and 3.7% in 2016.
As for China, there were sharp reductions in growth forecasts for Russia, Brazil, East Middle East and Africa.
Russia is headed for a deep recession, with a contraction of 3% forecast for this year, according to the background. Has been reduced by over 1% growth forecast for this year Brazil, and the largest economy in Latin America is likely to expand just 0.3% in 2015 and 1.5% next year, according to the IMF.
Compared to these large reductions, cuts of 0.2% and 0.3% this year in the eurozone are relatively minor. They are based on the European Central Bank introduced a policy of quantitative easing this week.
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