Ireland 'only bailout country to post growth', says IMF
IRELAND is the only bailout country in the eurozone likely to post any growth this year as we begin a "bumpy recovery", the IMF says in a report on the global economy which is released today.
The IMF predicts real gross domestic product will expand 0.4pc this year and 1.4pc next year.
That's well below the Government's forecasts and slightly more pessimistic than previous IMF forecasts.
The IMF also revises down forecast for global growth and now sees the world economy expanding by just 3.3pc this year and a sluggish 3.6pc next year.
It warned that the slump in world trade will hurt emerging markets, developing countries and the developed world but said the prospects could improve if clouds over the euro area are lifted.
The gloomier picture came as the IMF said prospects have deteriorated further and risks have increased.
Advanced economies are projected to grow by 1.3pc this year, compared with 1.6pc last year and 3pc in 2010, with public spending cutbacks and the still-weak financial system weighing on prospects.
Growth in emerging markets and developing economies was marked down compared with forecasts in July and April to 5.3pc, against 6.2pc last year. Leading emerging markets such as China, India, Russia, and Brazil will all see slower growth. Growth in the volume of world trade is projected to slump to 3.2pc this year from 5.8pc last year and 12.6pc in 2010.
"Low growth and uncertainty in advanced economies are affecting emerging markets and developing economies through both trade and financial channels, adding to homegrown weaknesses," said IMF economist Olivier Blanchard, who was attending the organisation's annual meeting in Tokyo this week.
The IMF said that its forecast rested on two crucial policy assumptions--that European policymakers get the euro area crisis under control and that policymakers in the US take action to tackle the 'fiscal cliff' and do not allow automatic tax increases and spending cuts to take effect.
Failure to act on either issue would make growth prospects far worse.
In the US, growth will average 2.2pc this year.
Real GDP is projected to expand by about 1.5pc during the second half of 2012, rising to 2.75pc later in 2013.
In the euro area, real GDP is projected to decline by 0.4pc in 2012 overall.
GDP is projected to stay flat in the first half of 2013 and expand by about 1pc in the second half.