IMF projects modest growth pickup in 2013

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New home construction in California, United States -IMF

Global growth will strengthen gradually in 2013, says the International Monetary Fund (IMF) in an update to its World Economic Outlook (WEO), as the constraints on economic activity start to ease this year. But the IMF says the recovery is slow and the report stresses that policies must address downside risks to bolster growth.

The report notes that policy actions have lowered acute crisis risks in the euro area and the United States. Japan's stimulus plans will help boost growth in the near term, pulling the country out of a short-lived recession.

The report says effective policies have also helped support a modest growth pickup in some emerging market and developing economies. And recovery in the United States remains broadly on track. Global growth is projected to strengthen to 3.5 percent this year, from 3.2 percent in 2012—a downward revision of just 0.1 percentage point compared with the October 2012 WEO.

The IMF report says if crisis risks do not materialize and financial conditions continue to improve, global growth could even be stronger than forecast. But downside risks remain significant, including prolonged stagnation in the euro area and excessive short-term fiscal tightening in the United States.

Donn Bobb, United Nations.

Duration: 1’12″

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