The IMF has warned that the world economy may never return to the pace of expansion seen before the financial crisis of 2008.
The News International Team
For the third time this year, the International Monetary Fund (IMF) cut the world’s growth rate to 3.3 percent in 2014 and 3.8 percent in 2015 owing to weaker expansions in Japan, Latin America and Europe.
The global lending organization, in its World Economic Outlook report published on Tuesday, has warned that the world economy may never return to the pace of expansion seen before the financial crisis of 2008.
The IMF, however, has upgraded India’s FY15 GDP growth to 5.6 percent from the interim forecast of 5.4 percent made in July and estimates FY16 growth to be at 6.4 percent. The fund believes a pick up in exports and investments have aided India’s recovery.
Speaking at the event, Research Director Olivier Blanchard said some emerging markets (EMs) are struggling and mentions Brazil and Russia as the unfortunate recipients of geopolitical uncertainity.
“Uncertain investment prospects in Russia had already led to low growth before the Ukraine crisis, and the crisis has made it worse,” he said.
Given this weakness, the IMF has lowered its growth forecasts for EMs and developing economies to 4.4 percent this year and 5.0 percent next year.
With inputs from CNBC and agencies