IMF cuts growth forecast for U.S., sees pickup in Europe, Japan

IMF cuts growth forecast for U.S., sees pickup in Europe, Japan

“More subdued growth prospects lead, in turn, to lower spending and lower growth today,” he said.

Global growth in 2015 will come by way of a rebound in growth from advanced economies — forecast to increase from 1.8 percent last year to 2.4 percent this year

The growth is expected to be buttressed by the decline in oil prices. Oil prices are projected to decline further still in the event a nuclear deal is struck between the U.S. and Iran. An agreement could result in a lifting of sanctions against Iran and a major surge in supply on global markets.

Economic conditions in developing economies and fledging economies, the survey found, are highly variable and react more sensitively to external conditions than in developed economies.

The oil price declines, for example, will sharply slow growth for oil exporters, especially those that also face difficult initial conditions.

Growth in Latin America countries will continue to weaken due to lower commodity prices. Brazil’s outlook is also affected by a drought, tighter macroeconomic policies and weak private-sector sentiment.

The fund expects Japan to grow 1 percent this year and 1.2 percent next year, versus an earlier forecast of 0.6 percent this year and 0.8 percent in 2016. The Japanese economy shrank 0.1 percent in 2014.

— This story was based in part on wire service reports.

via NorthEast Calling http://ift.tt/1OaDT0a