World economy to recover marginally in 2013: IMF
As per 188-member International Monetary Fund’s (IMF) World Economic Outlook (WEO) report, the global economy will undergo modest upturn in 2013 as the constraints on growth gradually ease, but policy complacency should be guarded against as risks remain.
As per the report, economic environment improved modestly in the 3rd quarter of 2012, driven by acceleration in emerging economies and the United States. Global financial conditions improved further in the 4th quarter of 2012 with sovereign spreads in weak euro area countries declined considerably.
However, in the euro zone, the recuperation in economy after a prolonged contraction is delayed, and Japan slipped into recession in the second half of 2012.
As per IMF forecast:
The world output would expand 3.5% in 2013, a modest gain from 3.2% in 2012.
- Advanced economies to grow at a rate of 1.4 % in 2013,
- Euro zone is likely to witness a contraction of 0.2% in 2013.
- The U.S. economy expected to rise by 2% in 2013 on the assumption that the spending cuts will be replaced by back-loaded measures.
- The Japanese economy is expected to expand 1.2% in 2013.
- Developing economies is projected to accelerate from 5.1% in 2012 to 5.5% in 2013.
- China’s economy to touch 8.2% in 2013 from 7.8% in 2012.
The Fund has suggested United States to avoid excessive fiscal consolidation in the short term, promptly raise the debt ceiling, and agree on a credible medium- term fiscal consolidation plan focused on entitlement and tax reform.