The IMF projects that consumer prices in the country will rise by 7.9 percent by the end of the fiscal year
IMF to lower global growth estimate again
The International Monetary Fund (IMF) has hinted that it is going to lower its world economic growth forecast for 2014 to around 3 percent from 3.4 percent despite a moderate global economic performance, reports the World Economic Forum (WEF) website.
Published : 11 Sept 2014, 04:32 PM
Updated : 8 Oct 2014, 09:27 AM
IMF's Deputy Managing Director Min Zhu gave this indication in a panel discussion on the global economic update at the World Economic Forum's (WEF) annual meeting of the New Champions, in Tianjin, China – also known as Summer Davos - on Sept 10.
The projection details will be released on Oct 7.
Though the global economy is doing well, the pace of growth is short of expectations. The IMF had earlier revised its projection in July this year to 3.4 percent, marking a drop of 0.3 percent.
“The global economy continues its recovery, but in a very moderate path. We downsized our projection for this year from 3.7 percent to 3.4 percent. But in the first half of this year, the global economic growth is surprisingly weak, which really will say something about the future,” Min Zhu said.
“And the whole thing is different economies are in different bends in cycles. The advanced economies are trying to get out of recessions. US in the top, but many other advanced economies, Europe and Japan, are not out yet. Emerging markets are over the cycles now,” he added.
He thinks unconventional monetary policies by the Federal Reserve will bring lots of uncertainties to the market and geopolitical risks also put the global economic growth into risk.
He also thinks the Fed's unconventional monetary policy will not only impact the US economy but will also influence the global economy.
He said, “If it stays in line with growth, with good financial foundations, then it will have a positive impact on US economy as well as on global economy. But if it is in line with financial instability in financial market, not complete in line with growth, then it will have negative impacts on global economic growth.”
It emerged from the discussion that the European Union was doing badly compared to the previous year; the US financial market misread the Federal Reserve's interest rate forecast; slowdown of Chinese economy was temporary and that structural reforms could bring it back to the growth path.
Victor Halberstadt, Professor of Economics, Leiden University, Netherlands; Akira Amari, Minister for Economic Revitalisation and Minister for Economic and Fiscal Policy, of Japan; Li Daokui, Dean, The Schwarzman Scholars Programme, Tsinghua University, People's Republic of China; and Kenneth Rogoff, Thomas D Cabot Professor of Public Policy and Professor of Economics at Harvard University
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