IMF set to raise forecast for global growth

A faster-than-expected expansion in the world economy will see IMF revise its forecast upwards in about three weeks

International Monetary Fund managing director Christine Lagarde speaking at a joint press conference on the conclusion of her visit to Kenya, with Kenya’s National Treasury Cabinet Secretary Henry Rotichand and Kenya’s Central Bank Governor Njuguna Ndungu  in Nairobi. Lagarde is on a two country visit to Africa. Photograph: Stephen Jaffe/EPA

International Monetary Fund managing director Christine Lagarde speaking at a joint press conference on the conclusion of her visit to Kenya, with Kenya’s National Treasury Cabinet Secretary Henry Rotichand and Kenya’s Central Bank Governor Njuguna Ndungu in Nairobi. Lagarde is on a two country visit to Africa. Photograph: Stephen Jaffe/EPA

Wed, Jan 8, 2014, 07:48

The International Monetary Fund will raise its forecast for world growth, managing director Christine Lagarde said, underscoring confidence in the global recovery as the outlook for the US improves.

“We will be revising upwards the global forecast for economic growth” in about three weeks, Lagarde told reporters yesterday in the Kenyan capital of Nairobi. A faster-than-expected expansion in the world economy contrasts with the outlook in October, when the IMF lowered its expectation for the pace of expansion for 2014.

Lagarde said in December the fund sees “a lot more certainty” for the US economy this year. The US jobless rate, which fell to 7 per cent in November from 7.3 per cent in October, will keep declining as confidence increases that the economy is on a sustainable growth path, she said last month.

The IMF currently forecasts global expansion of 3.6 per cent this year. There may be knock-on effects for emerging nations as the recovery in advanced economies raises the threat of financial market turbulence, Lagarde said.

“As financial conditions in advanced economies normalize, the risk of heightened volatility in financial markets may create new challenges in emerging market economies,” she said.

Bloomberg