IMF to Revise Forecast for World Economic Growth Downwards
The International Monetary Fund’s (IMF) managing director, Christine Lagarde, warned that the outlook for world economic growth has deteriorated as both developed and major emerging nations show signs of slowdown. Her comments come a day after the European Central Bank (ECB), the Bank of England (BoE) and China’s central bank each announced an easing of monetary policy.
In a speech given at an economic symposium in Tokyo, Lagarde said: “In the last few months, the global outlook has been more worrying for Europe, the US and large emerging markets,” adding that the IMF, which will publish an update to its World Economic Outlook report on 16 July, was likely to lower many of its previous growth forecasts.
In April the IMF predicted world economic growth this year would average 3.5%. Lagarde said that the revised figure would not be an “enormous variation”, but would be a reduction.
Lagarde welcomed recent co-operation by eurozone leaders to address the sovereign debt crisis, but said that further fiscal cooperation would be needed to complete necessary reforms. “It’s also a question of implementation -diligent, rigorous, steady implementation,” she added. The announcement by the ECB on 5 July that its refinancing rate was being reduced to a historic low of 0.75% had been a further positive move.