Ahead of an annual meeting of the International Monetary Fund and the World Bank, the IMF released its latest World Economic Outlook. The report predicts global economic growth will slow down through 2013.
The report, issued on Tuesday as the IMF prepares for its meeting in Tokyo, indicates that advanced economies are only expected to grow by 1.3 percent this year. That is down from 1.6 percent last year and 3.0 percent in 2010.
"Low growth and uncertainty in advanced economies are affecting emerging markets and developing economies through both trade and financial channels, adding to homegrown weaknesses," said IMF Chief Economist Olivier Blanchard.
Over 10,000 central bankers, finance ministers, executives from the private sector, academics and journalists are expected in Tokyo for the week-long gathering that focuses on global economic issues.
In addition to Tuesday's World Economic Outlook, the Global Financial Stability Report, which examines the state of the financial sector, and the Fiscal Monitor examining public finances will be released.
The IMF cautioned that its forecast of sluggish growth for the rest of the year and into 2013 could be made much worse if the eurozone is unable to get its debt crisis under control. Additionally, the United States faces further strain on its economy if deficit reduction measures do not come into effect in time to prevent automatic tax increases and spending cuts. The US must also address a Congressional stalemate over raising its debt ceiling.
In the eurozone, economic growth is expected to decline slightly this year and make a small recovery of 0.2 percent growth next year. This is a lower estimate than predicted in the IMF's World Economic Outlook in July 2012.
Germany's projected growth remains at 0.9 percent and is expected to remain flat in 2013. Last year, the German economy grew by 3.1 percent, and in 2010, it grew by 4.0 percent.
mz/jm (AFP, dpa, Reuters)