The organisation’s latest World Economic Outlook is now predicting global growth of 3.2 per cent this year. A year ago, the forecast was for 3.8 per cent growth but Maurice Obstfeld, IMF chief economist, now describes the pace of growth as “increasingly disappointing” across all types of economies.
“Consecutive downgrades of future economic prospects carry the risk of a world economy that reaches stalling speed and falls into widespread secular stagnation,” said Mr Obstfeld as he launched the latest report.
The forecast for growth in Nigeria suffered the largest downgrade because of the low price of crude oil, and Brazil and Russia were among many others predicted to experience weaker growth than previously forecast, though the figure for India remained unchanged.
China, however, received a slight upgrade because of strong growth in its services sector, although there was a warning that there could be “bumps along the way” as the Chinese economy shifts towards more consumer spending and services, rather than concentrating solely on manufacturing. Eventually, though, the IMF said the switch would eventually benefit China itself and the world.