For the last review of 2012, we will present the economic growth forecasts for 2013 by leading institutions.
Generally, the latest forecasts present a gloomier picture of global economy than ones from prior months do.
Worldwide economic situation does not seem to get any better as, per IMF, “prospects have deteriorated further and risks increased”.
The International Monetary Fund global growth forecast for 2013 was revised downwards to 3.6%.
IMF’s Chief Economist, Olivier Blanchard, said in the annual IMF World Bank meeting in Tokyo:
“Low growth and uncertainty in advanced economies are affecting emerging market and developing economies through both trade and financial channels, adding to homegrown weaknesses”.
Note that the IMF emphasized that its forecast was dependent on two crucial policy assumptions, that European leaders will get the Eurozone crisis under control and finding a solution for the fiscal cliff by the end of the year.
A failure in achieving one of the above would lead the actual growth to be much lower.
The Organisation for Economic Co-operation and Development cut its growth forecast for 2013 (for the 34 member countries’ economies) from the 2.2% forecast in May to 1.4%.
Pier Carlo Padoan, OECD chief economist, warned that the risk of a serious global recession cannot be ruled out:
“Over the recent past, signs of emergence from the crisis have more than once given way to a renewed slowdown or even a double-dip recession in some countries”.
The European central bank cut its growth forecast for 2013 to -0.3%, (compared to the September +0.5% forecast), following a growth forecast of -0.5% in 2012.
The ECB president, Mario Draghi, said that weak Eurozone activity is expected to continue into next year, as leading economic indicators reflect the weakness of European economy.
At the same breath, Draghi provided a more optimistic outlook, saying that a gradual recovery should start later in 2013, due to the expected increase in global demand and the positive effects of low interest rates in European economy.