IMF sees global economy growing at 3.5 per cent in 2013

Global economic growth will average 3.5 per cent in 2013 led by emerging markets, developing countries and the US, up from 3.2 per cent in 2012, as the risks of the European financial crisis abate, the International Monetary Fund (IMF) said in a report released today.

In an update on the World Economic Outlook (WEO), IMF said growth released today IMF said global growth will strengthen gradually in 2013, as the constraints on economic activity start to ease this year. But the recovery will be slow, and the report stressed that policies must address downside risks to bolster growth.

The report noted that policy actions have helped lower acute crisis risks in the euro area and the United States while Japan's stimulus plans will help boost growth in the near term, pulling the country out of a short-lived recession.

Effective policies have also helped support a modest growth pickup in some emerging market and developing economies, IMF said, adding that recovery in the United States also remains broadly on track.

Global growth is projected to strengthen to 3.5 per cent this year, from 3.2 per cent in 2012 - a downward revision of just 0.1 percentage point compared with the October 2012 WEO.

If crisis risks do not materialise and financial conditions continue to improve, global growth could even be stronger than forecast, the report said. But downside risks remain significant, including prolonged stagnation in the euro area and excessive short-term fiscal tightening in the United States.