The International Monetary Fund has cut its global growth forecast for 2015 after a harsh winter led to a weak start in the US.
In an update to its World Economic Outlook (WEO), the Washington-based IMF said it now expected global output to expand by 3.3%, down from the 3.5% it pencilled in three months ago.
It also shaved its forecasts for four of the G7 leading industrial countries – the US, the UK, Japan and Canada – and said the risks to its forecast were skewed to the downside.
Growth in the US is now projected to be 2.5% this year, opposed to the 3.1%the IMF forecast in April. The UK’s growth forecasts have been cut from 2.7% to 2.4% in 2015 and from 2.3% to 2.2% in 2016.
The updated WEO showed global growth at 3.3% in 2015, slightly lower than the 3.4% recorded in 2014. In 2016, growth is expected to strengthen to 3.8%.
The IMF said it saw activity in the advanced economies picking up from 2.1% this year to 2.4% in 2016, but accepted that the expected acceleration in growth had yet to materialise.
“Disruptive asset price shifts and a further increase in financial market volatility remain an important downside risk,” it said. “Raising actual and potential output through a combination of demand support and structural reforms continues to be the economic policy priority.”
via The Guardian