IMF lowers global growth forecast, but downgrades UK growth the most

According to the IMF, the UK’s GDP will rise by just 0.2% in 2012 as against the previous forecast of 0.8%.

The IMF also lowered its expectations for the UK's growth for next year from 2% to 1.4%. The lowered forecast is an indication that the UK may be slipping into a double-dip recession.

The IMF’s latest figures compare to the 2% growth that the Bank of England and the Office for Budget Responsibility, are predicting for the UK for next year.

The organisation has revised its forecast for the global economy too, blaming the Eurozone debt crisis for the gloomy conditions.

It has predicted that the global economy will grow by 3.5% in 2012 and 3.9% in 2013. In April, it predicted that the global growth for 2013 will be at 4.1% global growth it predicted in April.

The IMF’s World Economic Outlook report noted that in the last quarter, the global recovery has shown signs of further weakness. Financial market and sovereign stress in the euro area periphery have ratcheted up, close to end-2011 levels, the report warned.

The IMF did not revise its growth forecast for the Eurozone. It maintained that the eurozone will contract by 0.3% in 2012. Its gloomy outlook for global growth has highlighted the growing risk of the Eurozone debt crisis and the contracted growth from developed economies.

Growth in a number of major emerging market economies has been lower than forecast. “Growth momentum has slowed in various emerging market economies, notably Brazil, China, and India,” the report stated.

It has predicted the emerging market's growth to be at 5.6% this year, marginally down from its previous estimate.

The organisation reduced India's growth projections for this year by 0.7% to 6.1%. It reduced India's growth for 2013 too from 7.2% to 6.5%.