The International Monetary Fund on Tuesday published its updated forecasts on world economic growth. It predicts that the world economy will grow at a slower pace than what the multilateral lender had expected in April.
Two issues stand out in these revised forecasts.
One, the main reason why the global economy is growing at a slower pace than expected is the sudden loss of economic momentum in the developing world.
In fact, the growth forecasts for Japan, Canada and the UK have been raised. Spain’s is unchanged.
Two, India will also grow slower than what was earlier expected, by 20 basis points. But the real pressure points are South Africa, Russia and Brazil; their growth forecasts for 2013 have been lowered by 80, 90 and 50 basis points, respectively.
The situation is still grim, but are these signs that the worst is over in India?