IMF report cautiously optimistic about global growth

The International Monetary Fund expects Australia will grow at a slightly lower pace in 2013 than it did in 2012, predicting total growth of 3%, followed by 3.3% in 2014. Last year, the Australian economy grew at 3.6%.

China is projected to grow at 8% this year, up from last year’s 7.8% growth, while India is also expected to accelerate, rising to 5.7% growth from 4% last year.

‘‘We are in a better place but … we’re not out of the woods,’’ IMF chief economist Olivier Blanchard reportedly said at a media conference when releasing the IMF’s quarterly World Economic Outlook.

Tom Taylor, the head of international economics at NAB, says the report is largely good news as it shows the IMF thinks the global economy has hit its low-point.

“Most of the world’s growth for the past few years has been occurring in places outside the developed, advanced economies,” he told SmartCompany.

“The IMF report envisages a gradual pickup in global economic growth, coming from an acceleration in the big advanced economies, like the United States and Japan, and an ending of the recession in the eurozone.”

“Across the big advanced economies, we can see growth is expected to accelerate… and that’s pretty consistent with [NAB’s] own views.”

The United States is expected to grow at 1.9% in 2013, down from 2.2% in 2012, before accelerating to 3% in 2014. Estimates for Japan have been dramatically revised upwards to 1.6% in 2013, after the government announced a large program of monetary easing earlier this month. January’s IMF outlook report had expected Japan to grow at just 0.4% in 2013.

The IMF expects world growth to grow at 3.3% this year and then 4% in 2014.

However, Taylor said, the report also highlights risks that hang over the global economy.

“The first of these is the eurozone, where we’ve been reminded recently of the dangers given the problems in Cyprus,” he said.

“The second one is the concerns over the US budget. So far this year, that’s turned out better than it might have, but are still concerns.”