IMF cuts global economic growth forecast to 4 per cent
21 Sep 2011
The International Monetary Fund (IMF) has projected a moderation in global economic growth to about 4 per cent through 2012, from over 5 per cent in 2010.
The IMF's World Economic Outlook (WEO) has projected real GDP in advanced economies growing at a slower 1.5 per cent in 2011 and 2.0 per cent in 2012, helped by a gradual unwinding of the slowing down process.
The report said the Indian economy would grow at a slower pace of 7.8 per cent in 2011 and at an even slower 7.5 per cent in 2012, against 8.2 per cent and 7.8 per cent, respectively, forecast earlier.
The IMF report said investments in emerging countries like India would slow down on global uncertainties while government expenditure will be held back by bulging deficits.
In India, the report said, "Investment is expected to remain sluggish, reflecting, in part, recent corporate sector governance issues and a drag from renewed global uncertainty and less favourable external financing environment."
IMF expects monetary tightening - both by emerging and advanced economies - to push overall deficits by 1 per cent and 0.25 per cent, respectively, of emerging economies' GDP in 2011 and 2012.