Finance

Home page

Finance

IMF predicts global economic slowdown

09 October 2008 14:19 (UTC +04:00)

Baku. Vahab Rzayev â€“ APA-Economics. The world economy is decelerating quicklyâ€”buffeted by an extraordinary financial shock and by still-high energy and commodity pricesâ€”and many advanced economies are close to or moving into recession, the IMF says in its latest World Economic Outlook (WEO).
The October 2008 report, which was released two days prior to the IMF-World Bank Annual Meetings in Washington, said that growth in emerging economies is also weakening after years of strong growth, though it will still drive global growth.
On an annual basis, global growth is expected to moderate from 5.0 percent in 2007 to 3.9 percent in 2008 and 3.0 percent in 2009.
The world economy is entering a major downturn in the face of the most dangerous financial shock in mature financial markets since the 1930s, according to the WEO, which now expects world growth to slow to 3.0 percent in 2009â€”0.9 percentage point lower than forecast in the July 2008 WEO Update.
Following sluggish growth through the remainder of 2008 and early 2009, the anticipated recovery later in 2009 will be exceptionally gradual by past standards. This is because financial conditions are expected to remain very difficult, even assuming that actions by the U.S. and European authorities succeed in stabilizing financial conditions and in avoiding further systemic events.
Despite the deceleration of global growth, headline inflation has risen around the world to the highest rates since the late 1990s, pushed up by the surge in fuel and food prices. In the advanced economies, 12-month headline inflation registered at 4Â¼ percent in August.2008, down modestly from a peak in July in the wake of some commodity price easing.