International Monetary Fund (IMF) in its latest assessment of the global economy released on 16 April 2013 revised its world growth forecast for 2013 and slashed it to 3.3 percent from previous forecast of 3.5 percent predicted in January 2013.
IMF revised its forecast because of the continued recession in the Eurozone. The IMF also forecasted that the economic growth will be on its pick by the second half of the year. The slow growth rate of the United States region is also a region behind the downgrade of the forecast.
The Chief Economist of IMF, Olivier Blanchard warned that the fresh bailout of Cyprus and weakness of Italy could spark setbacks for the international economy.
IMF in its assessment also expressed concerns over the global fragmentation of the dynamism of the emerging economies and the United States. Slow growth in countries like Russia, Brazil, China and India is also a reason for economic weakness.
The global economy survived from the crash after defuse of the two largest short term threats to the recovery and they were disintegration of the eurozone and extreme budget cuts and tax hikes in United States. The U.S growth forecasted for the year 2013 is 1.9 percent and for Eurozone it is 0.3 percent. The measures adopted by the world to get out of the financial crisis have been failing due to the bad debt and weak capital hobbled by the banks.
Due to Bank of Japan’s ambitious plan launched to reflate the economy, the IMF upped its forecast for the country to 1.6 percent from initial 1.2 percent.
Statement from World Economic Outlook Report of IMF
IMF in its WEO Report suggested that the Global prospects have improved again but the road to recovery in the advanced economies will remain bumpy.
Economies whose forecast has been lowered for 2013 by IMF
• China's growth by 0.1% point to 8.0%
• Brazil by 0.5% points to 3.0%.