The International Monetary Fund (IMF) has predicted slower global growth until the end of 2014 as Europe’s recession drags on and economic growth slows in key BRIC countries.
The IMF cut its expectation for global economic growth in the current year from 3.3 percent to 3.1 percent, and from 4.0 to 3.8 in 2014.
IMF Chief Economist Olivier Blanchard said there’s a different reason for the slowdown in each BRIC country -- Brazil, India, China, and Russia -- including unproductive investments in China and low investment levels in Brazil.
But he said there seemed to be one common cause.
"I think behind this what there is is a slowdown in underlying growth, not the cyclical [growth] but just the average rate," Blanchard said "It’s clear that these countries are not going to grow at the same rate that they did before the crisis."
The new forecast came in the IMF’s update to its "World Economic Outlook," which was issued three months ago.
Among developing countries, China and Brazil’s growth forecasts were both downsized. China’s 2014 numbers sank 0.6 percentage points and Brazil's 0.8 points.
The IMF also revised its forecast for the eurozone, which was previously expected to contract by 0.4 percent this year and now seems set to drop 0.6 percent.
In a bit of good news, the economic forecast for Central and Eastern European countries remain unchanged, at 2.2 percent growth in 2013 and 2.8 in 2014.
Russia’s projected economic growth rate was lowered 0.9 percentage points this year -- from 3.4 to 2.5 percent -- and 0.5 percentage points in 2014 -- from 3.8 to 3.3 percent.
CIS states, not including Russia, had an unchanged forecast for this year and a drop of 0.3 percent in 2014, to 4.3 percent.
The IMF said the anticipated scale back by the U.S. government of economic stimulus funds also played a role in the new forecast, as well as the continuation of deep, across-the-board spending cuts, known as sequestration.
The new projected growth forecast for the U.S. economy is 1.7 percent for 2013 and 2.7 for 2014 -- representing a drop from the previous forecasts of 1.9 percent and 2.9, respectively.
Written by Heather Maher based on reporting by RFE/RL, AP, and "The Guardian"