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Categories: Annual and Spring meetings | Economic outlook

The report examines the external effects of domestic policies in five systemic economies while also providing an added perspective to the policy discussions with these economies in the context of IMF bilateral and multilateral surveillance.

Categories: Annual and Spring meetings | Press briefings

Global growth is projected to increase during 2013, as the factors underlying soft global activity are expected to subside. However, this upturn is projected to be more gradual than in the October 2012 World Economic Outlook (WEO) projections. Policy actions have lowered acute crisis risks in the euro area and the United States. But in the euro area, the return to recovery after a protracted contraction is delayed. While Japan has slid into recession, stimulus is expected to boost growth in the near term.

IMF’s Finance & Development magazine explores innovative approaches to managing our natural resources as well as the revenue generated from sales of natural resource products.

Asia’s developing economies represent the region’s economic frontier, emerging as a new source of economic dynamism. These countries aspire to climb the development ladder by addressing the challenges of infrastructure, technology and financing.

Growth in the Asia-Pacific region has slowed. External headwinds played a major role, as the recovery in advanced economies suffered setbacks. Weaker momentum in China and India also weighed on regional economies. For Asia as a whole, GDP growth fell to its lowest rate since the 2008 global financial crisis during the first half of 2012. With inflationary pressures easing, macroeconomic policy stances remained generally supportive of domestic demand and in some cases were eased further in response to the slowdown. More broadly, financial conditions remain accommodative, and capital inflows have resumed. Going forward, growth is projected to pick up very gradually, and Asia should remain the global growth leader, expanding over 2 percentage points faster than the world average next year. However, considerable downside risks remain, in particular with regard to the euro area crisis. The priorities for policymakers are to support noninflationary growth, maintain financial stability, and remain responsive to weaker-than-expected outcomes. Refocusing structural and fiscal reform efforts toward sustained and more inclusive growth remains a priority.

Global growth is projected to remain subdued at slightly above 3 percent in 2013, the same as in 2012. This is less than forecast in the April 2013 World Economic Outlook (WEO), driven to a large extent by appreciably weaker domestic demand and slower growth in several key emerging market economies, as well as a more protracted recession in the euro area.

A video presentation by Reza Moghadam, Director of the IMF’s European Department, highlights the need to keep up the reform momentum, especially when the first glimmers of growth for the euro area are appearing.

The findings suggest that in countries with infrastructure needs, now is a good time for an infrastructure push.

Monetary accommodation remains critical in supporting the economy by encouraging economic risk taking in the form of increased real spending by households and greater willingness to invest and hire by businesses.

One of the downside scenarios, according to the report, is that tighter financial conditions combined with further weakening of emerging market growth could lower global output by as much as 2 percent.

Listen to IMF economists and other experts discuss key economic and financial issues of the day.