October 5, 2012 3:06 pm

IMF looks set to trim global growth forecast

IMF director Christine Lagarde©Getty

IMF director Christine Lagarde

The International Monetary Fund will shave one tenth of a percentage point off its estimate for global growth this year, according to a report in a German newspaper.

Handelsblatt, a German daily, reported on Friday that the IMF now expected global economic output to expand by 3.3 per cent in 2012, down from its July estimate of 3.4 per cent. The fund will also lower its forecast for world growth in 2013 to 3.6 per cent, from its 3.9 per cent July estimate.

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The bleaker outlook brings the IMF forecasts into line with those of other economists. Christine Lagarde, IMF managing director, confirmed last month that the fund’s forecasts, due to appear in the new edition of its biannual World Economic Outlook, out next Tuesday, would be revised down.

Ms Lagarde said in September: “We continue to project a gradual recovery, but global growth will likely be a bit weaker than we had anticipated even in July, and our forecast has trended downward over the last 12 months.”

The IMF managing director blamed economic uncertainty and the slowdown in emerging markets for the weaker outlook. According to Handelsblatt, the IMF now expects the Chinese economy to grow by 8.2 per cent next year, against its earlier estimate of 8.4 per cent. The fund is also set to lower its forecasts for Indian and Brazilian growth.

The World Economic Outlook forecasts, released to coincide with IMF meetings, are often leaked ahead of publication. The next meeting will be held in Tokyo next week.

The IMF declined to comment on the report.

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