The International Monetary Fund will sound a fresh alarm over the state of the global economy this week when it reveals its latest forecasts for growth against the backdrop of slower world trade and jittery financial markets.
The expected warning over risks to financial stability and economic growth will underscore fears in the UK that its own economy has slowed in recent months, unable to shake off global pressures.
The IMF’s latest update is expected to reprise warnings about risks from a slowdown in emerging market economies, China’s downturn and lower commodity prices. The Washington-based Fund already cut its outlook in January and recent downbeat comments from its managing director Christine Lagarde were taken by many as a hint that more cuts are to come in Tuesday’s World Economic Outlook.
Lagarde said in a speech that the global economy had lost momentum and that “the recovery remains too slow, too fragile, and risks to its durability are increasing.” She also called on governments to pursue more growth-friendly policies.
“Given comments from Christine Largarde recently a downgrade to the IMF’s world growth forecasts looks to be on the cards,” said Ryan Djajasaputra, economist at the bank Investec.
The new economic outlook, published ahead of the IMF and World Bank spring meetings later in the week, will likely renew warnings over risks the global economy from expected moves by the US Federal Reserve to lift interest rates back to more normal levels.
In January, the IMF forecast world output would grow 3.4% this year and 3.6% in 2017. That was 0.2 percentage points lower than forecasts made just three months earlier – and the Fund said that the risks to its predictions were to the downside.
The new outlook will also include forecasts for individual countries, including the UK. The IMF has recently highlighted Britain’s relatively strong recovery but has also expressed concern about the economic impact of June’s EU referendum.
This article was written by Katie Allen, for theguardian.com on Sunday 10th April 2016 13.30 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010