Emerging market economies will once again be the major driver of growth as the International Monetary Fund (IMF) revised its global growth outlook.
The reacceleration in the global manufacturing and trade cycle happened particularly in the emerging market economies, with many advanced European economies lagging behind the global upturn, the Washington-based IMF said in its World Economic Outlook released Tuesday.
The Fund forecasts that world output will increase by 3.3% this year, 0.2% lower than in a previous estimate in January, with advanced economies expanding by 1.2% and emerging ones growing by 5.3%.
By regions, Sub-Saharan Africa’s economy will expand faster than previously forecast next year as the global economic recovery strengthens, the IMF said.
The region’s economy will grow 6.1 percent in 2014, more than the previous estimate of 5.7 percent and the 5.6 percent projected growth for this year.
Central and Eastern Europe is set to grow by a puny 2.2% this year, 0.3% less than in the Fund’s previous projection in January. The outlook for the CIS excluding Russia was cut even deeper, by 0.8%, with the region now expected to advance 3.5%.
Russia’s outlook was cut by 0.3% to 3.4%.
China is seen expanding by 8% this year, nearly flat from January’s projection, while India is expected to grow 5.7%, an estimate that is 0.2% lower than in the previous WEO update.
Brazil’s growth estimate was cut by 0.5% to 3% while Mexico’s remained nearly flat at 3.4%.
“Emerging market economies are in general doing well,” Oliver Blanchard, IMF economic counsellor and director of Research Department, said in a news conference.
“So far and to their credit policy makers have generally succeeded in keeping aggregate demand in line with output growth,” Blanchard said.
“At the same time potential growth has declined in some of the emerging countries and we shall not see again the high growth rates of the past.”
He said the forecast for China was made before the country released lower than expected GDP growth figures for the first quarter of this year.
The US is expected to grow by 1.9% while the eurozone is seen shrinking 0.3%.
PATRICK ATUANYA
