Clearview Midlands March 2014 - Issue 148 | Page 84
businessNEWS
IMF raises UK economic
growth forecast
The International Monetary Fund (IMF) has sharply
increased its growth forecast for the UK economy.
It now expects the economy to grow 2.4%
this year - faster than any other major
European economy - against its previous
forecast of 1.9%. In 2015, it expects growth
of 2.2%.
The IMF also raised its global growth
outlook slightly to 3.7%.
“Global growth is expected to increase in
2014 after having been stuck in a low gear in
2013,” the IMF said in its report.
The world’s largest economy, the US, is
expected to grow by 2.8% this year, an
improvement on the previous estimate of
2.6% that the IMF made in October.
It expects the euro area as a whole to grow by
1%. “The euro area is turning a corner from
recession to recovery,” the IMF said. However,
it added the pickup would be weaker in
economies that have been facing “financial
stress”, namely Greece, Spain, Cyprus, Italy
and Portugal.
The IMF also upgraded its forecast for the
Chinese economy to 7.5% this year.
But it also warned that “strengthening
global growth does not mean that the global
economy is out of the woods”.
It said governments in advanced economies
must not withdraw measures to support
growth prematurely.
Christine Lagarde, the IMF managing
director, has previously expressed concerns
about growth levels in the UK economy in
light of the government’s austerity drive,
which is designed to reduce debt levels.
But the IMF upgraded its forecast for the
UK in 2014 by more than for any other
economy. It also raised its forecast for growth
in 2015 to 2.2%.
“[The IMF] report provides further
evidence that the government’s long term
economic plan is working,” said a Treasury
spokesperson.
But Shadow chancellor Ed Balls sa Y