Global growth is forecast to rise moderately in 2015–16, from 3.3 per cent in 2014 to 3.5 per cent in 2015 and 3.7 per cent in 2016, revised down by 0.3 per cent for both years relative to the October 2014 World Economic Outlook (WEO).
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“Recent developments, affecting different countries in different ways, have shaped the global economy since the release of the October WEO, the report says,” said the International Monetary Fund.
“New factors supporting growth, lower oil prices, but also depreciation of euro and yen—are more than offset by persistent negative forces, including the lingering legacies of the crisis and lower potential growth in many countries.”
IMF’s Economic Counsellor and Director of Research Olivier Blanchard at the country level said the cross currents made for a complicated picture.
“It means good news for oil importers, bad news for oil exporters. Good news for commodity importers, bad news for exporters,” said Blanchard.
“Continuing struggles for the countries which show scars of the crisis, and not so for others. Good news for countries more linked to the euro and the yen, bad news for those more linked to the dollar.”
The Fund says, in advanced economies, growth is projected to rise to 2.4 per cent in both 2015 and 2016.
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“Within this broadly unchanged outlook, however, is the increasing divergence between the United States, on the one hand, and the euro area and Japan, on the other. For 2015, the U.S. economic growth has been revised up to 3.6 per cent, largely due to more robust private domestic demand.”
The IMF added that cheaper oil is boosting real incomes and consumer sentiment, and there is continued support from accommodative monetary policy, despite the projected gradual rise in interest rates.
“In contrast, weaker investment prospects weigh on the euro area growth outlook, which has been revised down to 1.2 percent, despite the support from lower oil prices, further monetary policy easing, a more neutral fiscal policy stance, and the recent euro depreciation.”