The "protracted" eurozone recession and lagging
growth in emerging markets are braking global economic expansion,
prompting the International Monetary Fund on Tuesday to lower growth
projections across most of the world.
In a quarterly update of its World Economic Outlook, the IMF pared its global projections by 0.2 percentage points to 3.1-per-cent growth this year and 3.8 per cent in 2014.
Among major economies, only Japan, Britain and Canada were now projected to grow more than had been anticipated in the IMF's April outlook.
"Weaker growth prospects and new risks raise new challenges to global growth and employment and global rebalancing," the Washington-based crisis lender wrote. "Policymakers everywhere need to increase efforts to ensure robust growth."
Emerging and developing economies are slated to continue to deliver the lion's share of global expansion, rising to projected 5-per-cent growth in 2013 and 5.4 per cent next year. The figures were 0.3 percentage points lower than forecast in April.
The eurozone economy was projected to keep shrinking this year by an estimated 0.6 per cent, before creeping back into the black with 0.9-per-cent growth in 2014, the IMF said. The figures echoed projections last week by the European Central Bank, which saw 1.1 per cent growth in 2014.
The IMF trimmed expectations for the United States, which has generally shared Europe's slow-growth tendencies since the 2008 financial crisis. The world's largest economy can expect 1.7-per-cent growth this year and a more robust 2.7-per-cent expansion in 2014.
Other factors in the IMF's lowered global expectations included anticipation that the US will start unwinding its monetary stimulus programme and, for major emerging economies, lower commodity prices, problems with financial stability and infrastructure bottlenecks.
Japan's growth projection for 2013 was raised by 0.5 percentage points to 2 per cent, reflecting "recent accommodative policies," the IMF said.
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