IMF lowers growth forecast for global economy

By in

The International Monetary Fund (IMF) has lowered its forecast for global economic growth for 2015 and 2016. The IMF expects a growth of only 3.5% this year, compared with the previous estimate of 3.8% which was made last October. The growth forecast for 2016 has also been cut to 3.7%.
The International Monetary Fund (IMF) has lowered its forecast for global economic growth for 2015 and 2016. The IMF expects a growth of only 3.5% this year, compared with the previous estimate of 3.8% which was made last October. The growth forecast for 2016 has also been cut to 3.7%.

The downgrade to the forecasts comes despite one major boost for the global economy: the dramatic decrease in oil prices, which is positive for most countries. The IMF expects that to be more than offset by negative factors and a weaker investment.

This reflects diminished expectations about the growth prospects for many developed and emerging economies over the next few years. If business expects weaker growth, there is less opportunity to sell goods and services and therefore less incentive to invest.

The slowdown in China is another factor behind the revised forecasts. On Tuesday, official figures showed that China’s growth slowed to 7.4% last year, from 7.7% in 2013. There are some exceptions to the pattern of worsening forecasts. The major one is the United States, now forecast to grow at 3.6% this year and 3.3% in 2016. This is well below China’s figures, even allowing for the slowdown, but that is to be expected. The IMF has suggested that emerging economies can grow more rapidly by adopting technology that’s already established in richer nations.