The International Monetary Fund has published their new World Economic Outlook report. Growth has been weak, but more interesting are the IMF’s forecasts:
Turning to forecasts, growth in the United States is projected to rise from 1¾ percent in 2013 to 2¾ percent in 2014 (Table 1). The projections assume that the sequestration will remain in place until 2014, longer than previously projected, although the pace of fiscal consolidation will still slow. Private demand should remain solid, given rising household wealth owing to the housing recovery, and still supportive financial conditions.
In Japan, growth will average 2 percent in 2013, moderating to about 1¼ percent in 2014. The stronger forecast for 2013 than previously projected reflects the effects of recent accommodative policies on confidence and private demand, while the somewhat softer forecast for 2014 reflects the weaker global environment.
The euro area will remain in recession in 2013, with activity contracting by over ½ percent. Growth will rise to just under 1 percent in 2014, weaker than previously projected, in part due to the persistent effects of the constraints discussed above and the expected delays in policy implementation in key areas, but also due to base effects from the delayed recovery in 2013.
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