IMF lowers global growth forecast for 2014 | Business| Economy and finance news from a German perspective | DW | 07.10.2014
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IMF lowers global growth forecast for 2014

The International Monetary Fund has said global growth in 2014 will be hampered by geopolitical tensions and a lack of investment. The Washington-based lender consequently revised its April forecast downward.

Presenting its World Economic Outlook in Washington on Tuesday, the International Monetary Fund said weaker-than-expected global activity in the first half of the year had prompted it to revise down its April 2014 forecast for annual global growth.

The IMF said it expected world growth to come in at 3.3 percent in 2014, or 0.4 percent lower than predicted in spring.

The report cited mounting geopolitical tensions in the Middle East, Ukraine and other regions as serious threats to global growth, adding that for the time being those conflicts had mostly been confined to the regions involved in economic terms. But the lender warned there were tangible risks of more widespread disruptions in the months ahead.

Monetary easing to stay with us?

IMF officials argued that given those risks, growth stimulus programs remained a top priority for governments and central banks around the world. They added that in advanced economies this would require continued support for monetary policies and fiscal adjustment and an increase in public infrastructure to spur growth and employment.

The IMF noted that financial markets had by and large been optimistic about future developments, with volatility levels being rather low. But this, it said, had not translated into a pickup in investment so far.

The lender's projection for next year was marked down modestly to 3.8 percent of global growth. It predicted a more rapid recovery in the United States, but also a pickup in activity in the 18-euro area. For emerging economies, there would be no homogeneous development in the years ahead, with a number of country-specific factors weighing heavily on nations such as Brazil, Russia and China, the IMF argued.

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