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International Monetary Fund flags up fresh risks to global growth


International Monetary Fund flags up fresh risks to global growth


The International Monetary Fund has warned of new risks to the global economy.

Amid an uneven and weaker than expected recovery from the last downturn, the IMF said the world is facing problems of low inflation, a permanent slowdown in growth rates in the west and lower growth in emerging economies.

It also flagged up the possible disruption to financial markets when the US Federal Reserve does start to raise interest rates.

The IMF’s economists believe the eurozone and Japan remain problematic, even as growth rebounds in the US and they are particularly concerned about geopolitical hazards and excessive risk taking.

In an assessment prepared for finance ministers and central bank governors of the G20 countries, the IMF said problems in the US, the eurozone, China, Japan, Russia and Latin America meant growth would not meet the 3.6 percent that was predicted for 2014 back in April.

The Fund’s assessment is the latest sign that mounting tensions in Ukraine and the Middle East have worsened the prospects for the global economy.

This week, the Organisation for Economic Co-operation and Development cut its forecasts for 2014 growth for all large economies except India.

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