In its latest forecast, the IMF says an unexpectedly stubborn euro zone recession and weakness in Japan will weigh on global economic growth this year. But a rebound in 2014 should deliver the fastest expansion since 2010.
The feeling is that we have avoided the cliffs but we still face the mountains.
“We have identified several risks, some of them are in Europe. There is the short-term risk that the populations in the euro periphery countries will not support the very tough adjustment programmes. And then the euro area as a whole will have to work on its constitutions with the number one priority being the creation of a banking union.” said Jörg Decressin, Deputy Director of IMF Research Department.
The IMF thinks global growth this year will be 3.5 percent, slightly less than its projection in October.
But it does still see a rebound next year to 4.1 percent expansion, if recovery takes hold in the eurozone.