Global recovery to accelerate in 2015: IMF

Global economic activity should strengthen in the 2nd half of this year and accelerate in 2015 although momentum could be weaker than expected, IMF chief Christine Lagarde said on Sunday, adding that the Fund did not expect a sharp slowdown in China. Lagarde said central banks’ accommodative policies could have only limited impact on demand and that countries should also act to boost growth by investing in infrastructure, education and health, provided their debt stays sustainable. The IMF’s update of its global economic outlook, expected later this month, will be slightly different from the forecasts published in April, she said. ‘Global activity is picking up but the momentum could be less strong than we had expected because potential growth is weaker and investment ... remains subdued.’ Lagarde estimated that growth in China this year would be between 7 and 7.5 per cent. ‘Despite the many responses to the crisis ... recovery is modest, laborious, fragile, and measures to boost demand, despite the goodwill of central banks, will find their limits,’ she told a conference in southern France. ‘We must therefore take steps to boost efforts to strengthen growth,’ she said adding ‘This is the opportunity in a number of countries to relaunch investment, without threatening the viability of public finances,’ according to AFP.