(MENAFN– ecpulse) The International Monetary Fund (IMF) on Tuesday cut its forecast for global economic growth, highlighting the increasing contrast between an improving U.S. economy and a slowdown in Asia and Europe.
The IMF said the global economy will expand by 3.3% in 2014, compared with 3.4% in its last forecast in July.
For 2015, the IMF said growth is seen at 3.8%, down from 4% in the last estimate.
The Eurozone economy is now expected to grow 0.8% this year, down from 1.1%. The region is dragged down by high unemployment, massive government debt, weak consumer spending and a lackluster lending climate.
Another recession is now a worry for the 17-nation bloc, threatened also by deflation, or falling wages and prices. The most alarming in the past period were signs of feeble growth in Germany.
As for China, the IMF trimmed growth forecasts from 7.7% to 7.4% in 2014. While growth rates remain high, the country has witnessed a notable slowdown, partly from a decline in the housing market.
Japan is projected to expand 0.9% in 2014, compared with 1.6% in July’s estimate. The country has been hit harder than expected after the national sales tax hike in April.
The U.S. economy, the only bright spot in the report, is projected to expand 2.2%, 0.5% higher than what was expected in July, with 3.1% growth seen in 2015.
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