Though uncertainly, the world economy is still recovering. This is stated in a new 'World Economic Outlook' by the International Monetary Fund (IMF). The authors draw attention to the risks associated with geopolitical tensions affecting the oil market and the threat of a new acute crisis in Europe.
'The risk of another crisis is still very relevant and could affect both advanced economies and emerging markets,' the report says.
It is reported that the pace of world economic growth, according to IMF forecast, will decline from about 4% in 2011 to about 3.5% in 2012. This is a consequence of weak activity in the second half of 2011 and the first half of 2012.
The authors underscore that the growth of economic activity in the U.S. in the second half of 2011 and the adoption of more effective policies in the Eurozone in response to the deepening economic crisis has weakened the threat of a sharp slowdown of global growth.
As a result, a slow growth will likely resume in the leading developed economies, and most emerging market and developing countries are expected to remain relatively stable activity. Altogether, the improvements made are very fragile.
'Due to the problems in Europe, economic activity in developed economies as a whole still would not justify the expectations, with growth of only about 1.5% in 2012 and 2% in 2013,' says the report. It stresses that the pace of job creation in Europe will remain sluggish.
Real GDP growth in emerging markets and developing countries will slow down to 6.25% in 2011 to 5.75% in 2012, but then re-accelerate to 6% in 2013 due to mitigation of macroeconomic policies and increased foreign demand.
'The end of the crisis and the good news about the U.S. economy are giving some optimism. It must be restrained. Even if there is no new crisis in Europe, most countries with developed economies still face major obstacles for growth,' the authors of a new report believe.
The report focuses on economic policy, as well as the analysis of economic developments and prospects.
The report is usually prepared twice a year for the meetings of the International Monetary and Financial Committee.