The International Monetary Fund said today that it expects the global recovery to continue with its momentum in 2014 as developed markets produce more, but warned that there were risks in emerging markets.
Nonetheless, the Washington-based IMF revealed that better policies are necessary in both richer and emerging economies to minimize the risk of prolonged sluggish growth. IMF said, through its World Economic Outlook, that global production should grow by 3.6 percent this year, which is expected to surge to 3.9 percent next year.
If this goes according to plan, it will make next year the highest year of expansion in 4 years, according to Reuters. While reduced fiscal austerity is expected to propel growth in Europe and United States, the picture is likely to less favorable in emerging markets; which are expected to grow slower than forecasted. Already, geopolitical risks occasioned by Ukraine conflict are threatening to curtail growth.
“The strengthening of the recovery from the Great Recession in the advanced economies is a welcome development,” the IMF said. “But growth is not evenly robust across the globe, and more policy efforts are needed to fully restore confidence, ensure robust growth, and lower downside risks.”
The IMF expects U.S. economy weather the harsh winter climate at the start of the year to grow by 2.8 percent in 2014, thanks to improving housing market, loose monetary policy and less-severe austerity measures. It also said it doesn’t expect the Fed to hike borrowing rates until the third quarter of 2015.
IMF slashed growth forecasts for emerging markets, including middle-income nations such as South Africa, Russia, Brazil and Turkey to 4.9 percent, which is lower than its previous estimate in January.
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