GDP growth in 2015 slower than 2014: IMF's Lagarde

OREANDA-NEWS. October 01, 2015. Global economic growth likely will be weaker this year than in 2014 and will accelerate only modestly in 2016, IMF managing director Christine Lagarde said today.

Addressing the Council of the Americas ahead of the release of the IMF's World Economic Outlook on 6 October, Lagarde said the IMF is seeing "modest" pickup in economic activity in the advanced economies.

Economic activity remains robust in the US and the UK, while the eurozone is witnessing a moderate recovery and Japan's economic is returning to positive growth.

But growth in the emerging economies is expected to decline for the fifth year in a row. While India remains a bright spot, China is slowing down as it rebalances away from export-driven growth, and Russia and Brazil face serious economic difficulties."

"There has been a sharp deceleration in the growth of global trade," Lagarde said. "And the rapid drop in commodity price is posing problems for most resource-based economies."

The IMF has not released its latest projections. But in July the fund was looking for world output to grow by 3.3pc this year, down from 3.4pc in 2014, and to quicken to 3.8pc in 2016.

Lagarde said the outlook for the global economy is being affected by two major uncertainties: China's economic slowdown and the prospect of rising interest rates in the US.

Investors' concerns about the slowing Chinese economy have put pressure on commodity exporters, which have relied on China as a key export destination. And this could lead to a prolonged period of low commodity prices.

But China's transition to a new global growth model and the normalization of US monetary policy are "healthy and necessary," she said.

Lagarde reiterated the IMF's call for the gradual removal of fossil fuel subsidies and for a price on carbon.