World economic growth stutters

03 February 2012

Global economic growth of 3.3% is expected in 2012, according to the latest International Monetary Fund (IMF) World Economic Outlook update. World GDP growth has been revised downward from the 4% predicted in September 2011.

The weaker outlook stems from the expectation of the European economy moving into a mild recession in 2012, with GDP forecast for the Euro area at 0.5%. Output for advanced economies is forecast to reach 1.2% in 2012, improving slightly in 2013 to 1.9%. Restricting the growth for 2012 is a fall in output for Italy (-2.2%) and Spain (-1.7%), while output growth in the US (1.8%), Canada (1.7%) and Japan (1.7%) is expected to help offset the decline in the Euro region.

Growth in emerging and developing economies, while still predicted to expand 5.4% in 2012, is expected to slow because of the challenging external environment and stuttering internal demand. Although anticipated to be lower than 2011, growth forecasts for China (8.2%), India (7%) and Russia (3.3%) are still expected to be well above those of the developed economies.

The IMF has also predicted non-oil commodity prices to fall 14% year-on-year in 2012, with improving supply conditions and weakening global demand cited as the reasons for the fall.

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