Global economic growth will climb only marginally this year as slowing output in major emerging markets and a feeble expansion in rich countries drag down near-term prospects, the International Monetary Fund (IMF) said Tuesday.
Emerging markets are on course for the sixth consecutive year of falling growth rates, led by a faster-than-expected slowdown in China, a steep contraction in Russia and recession in Brazil, the IMF said in its flagship World Economic Outlook released ahead of its semiannual meetings.
With sluggish recoveries in Europe and Japan and softer output in the U.S. as a stronger dollar weighs on exports, the global economy should expand by 3.5% this year, the IMF said. That forecast is up just 0.1 percentage point from last year’s expansion.
Global growth is roughly on par with the average of the last three decades. But it isn’t enough to surmount the legacies of the 2008 financial crisis: stubbornly high jobless rates, hefty debt burdens and stagnating growth in several of the world’s largest economies. Together with aging workforces and deteriorating productivity levels around the world, the global economy faces a bleak, l ow-growth outlook through 2020, IMF economists worry.
IMF Managing Director Christine Lagarde, who previewed the outlook in a speech last week, will urge the world’s finance officials meeting in Washington this week to use all available policy tools to jolt the global economy out of a nearly decadelong rut.
Fund officials are pushing for more easy-money policies in Europe and Japan despite the drag those policies can cause on U.S. and Chinese growth as they weaken the euro and yen at the expense of a strengthening dollar and yuan.
Source: MarketWatch
