The International Monetary Fund (IMF) has projected that global economy will grow by 3.3 per cent in 2015, which is marginally lower than in 2014, due to gradual pickup in advanced economies and a slowdown in emerging markets and developing economies.
IMF, in its updated version of World Economic Outlook released Thursday, also projects that 2016 growth will be 3.8 per cent.
"A setback to activity in the first quarter of 2015, mostly in North America, has resulted in a small downward revision to global growth for 2015 relative to the April 2015 World Economic Outlook (WEO)," it said.
"Nevertheless, the underlying drivers for a gradual acceleration in economic activity in advanced economies-easy financial conditions, more neutral fiscal policy in the euro area, lower fuel prices, and improving confidence and labour market conditions-remain intact," IMF report added.
IMF also said that in emerging market economies, the continued growth slowdown reflects several factors, including lower commodity prices and tighter external financial conditions, structural bottlenecks, rebalancing in China, and economic distress related to geopolitical factors.
"A rebound in activity in a number of distressed economies is expected to result in a pickup in growth in 2016," it said. "The distribution of risks to global economic activity is still tilted to the downside."
According to the latest outlook report, near-term risks include increased financial market volatility and disruptive asset price shifts, while lower potential output growth remains an important medium-term risk in both advanced and emerging market economies.
"Lower commodity prices also pose risks to the outlook in low-income developing economies after many years of strong growth," said the IMF.
Summary of the IMF WEO is depicted in the following info-graphic.
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