For the second time, the International Monetary Fund downgraded its growth projections and warned of an escalating danger of a global recession, as a downfall in emerging markets is pulling the world economy into its weakest progression since the financial crisis.
For emerging markets, the IMF reduced its forecast to 4% this year, down 0.2% in July, marking its fifth consecutive year of slumping growth. Deceleration in China and the succeeding decline in commodity prices unveiled a developing world that overinvested, borrowed excessively, and depleted its capacity to grow without major economic reforms.
The institution reduced its predictions for global growth to 3.1% this year, previously 3.3%. It also cut its projection for global growth in 2016 by the same amount to 3.6%. Moderate growth in the United States and a slight recuperation in the eurozone failed to offset dwindling output in emerging markets.
IMF’s outlook has established a gloomy tone in this week’s annual meeting of finance ministers and central bankers in Peru.
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