Global Economy To Grow More Slowly Than Last Year

    April 13, 2005

The International Monetary Fund expects the global economy to grow by 4.3% this year and 4.4% next year.

This is a slower rate compared to the stronger growth of last year. The IMF cites politicians failing to live up to their promises as one of the reasons. Imbalances such as the U.S. trade deficit and Europe’s growth gap have not been fixed.

“The balance of risks to the short-term outlook is tilted to the downside,” said the IMF.

According to an FX Street article,

Almost everywhere, the IMF sensed dangers lurking for the global economic outlook.

The IMF said it was concerned that U.S. financial market conditions ‘could tighten significantly,’ which would hurt domestic demand and potentially cause a shift of funds from emerging markets.

Another risk is from the oil markets, which are expected to remain tight and vulnerable to price shocks.

The IMF said that the success of the efforts of the Group of Seven countries and China has been limited.

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