International Monetary Fund: Global growth will be driven this year by a rebound in advanced economies
"A number of complex forces are shaping the prospects around the world," IMF Economic Counselor and Director of Research Olivier Blanchard said.
He added, "Legacies of both the financial and the euro area crises—weak banks and high levels of public, corporate, and household debt—are still weighing on spending and growth in some countries. Low growth in turn makes deleveraging a slow process."
However, the U.S. economic growth forecast for this year was lowered to 3.1 percent from 3.6 percent. The projection for next year was also lowered to 3.1 percent from 3.3 percent.
Domestic demand in the U.S. is expected to gain support from lower oil prices, more moderate fiscal adjustment, and continued support from an accommodative monetary policy stance, despite the projected gradual rise in interest rates and some drag on net exports from recent dollar appreciation, the IMF said.
Growth forecasts for the big four Eurozone economies - Germany, France, Italy and Spain - were also raised.
Outside of the euro area, the growth projection for U.K. for this year was retained at 2.7 percent, but the forecast for next year was cut to 2.3 percent.
The Chinese economic growth forecasts were retained at 6.8 percent for this year and 6.3 percent for next year."More subdued growth prospects lead, in turn, to lower spending and lower growth today," he said. "Large movements in relative prices, whether exchange rates or the price of oil, creates winners and losers."
