IMF: Global growth forecast down 3.1%

The International Monetary Fund cut its global economic growth forecast, citing new downside risks in key emerging-market economies and a deeper recession in the eurozone. The IMF projected the world’s economy would grow 3.1% in 2013, down from its April estimate of 3.3%. China and other emerging economic powers now face new risks, it warned, “including the possibility of a longer growth slowdown.” The global lender said that growth had been affected by increased financial market volatility and rising interest rates in advanced economies since its last World Economic Outlook report was published in April. “Emerging-market economies have generally been hit hardest, as recent increases in advanced economy interest rates and asset price volatility, combined with weaker domestic activity have led to some capital outflows, equity price declines, rising local yields, and currency depreciation,” the Fund said in a WEO update.

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