International Monetary Fund cuts forecast for UK and global economic growth

THE International Monetary Fund (IMF) has trimmed its forecast for UK and global economic growth this year and next.

Britain’s economy will expand by just 1 per cent in 2013, according to the respected body, 0.1 per cent less than previously predicted. 
The forecast for next year has been downgraded from 2.2 per cent to 1.9 per cent since October’s estimate.

The figures come ahead of the publication of official GDP estimates for the final quarter of last year, which many fear will show UK plc contracting.

The IMF’s “world economic outlook” update predicted that the global economy would grow 0.1 per cent less than anticipated in each year, by 3.5 per cent and 4.1 per cent respectively. Much of the reduction stemmed from a weaker outlook for the eurozone. “Policy actions have lowered acute crisis risks in the euro area and the United States. But in the euro area, the return to recovery after a protracted contraction is delayed,” the IMF said.

The pace of growth in China was set to increase to 8.2 per cent this year and 8.5 per cent in 2014, up from 2012 but still lower than the 10 per cent growth rates of 2010, the fund noted.

Developing Asia, including China and India, will remain the fastest-growing region in the world, according to IMF forecasts, with growth of 7.1 per cent this year 
and 7.5 per cent in 2014.

Africa, with growth of about 5.8 per cent this year and 5.7 per cent next year, is the world’s second-fastest growing economy.