According to the IMF, global growth is ‘moderate’, due to the combination of a further slowdown in emerging economies and a weak recovery in advanced economies.
Growth is likely to pick up only modestly over the rest of this year, the IMF said.
The IMF also commented on recent events in the markets, noting that the volatility alongside weaker capital flows and falling emerging market currencies has lead to greater downside risk for the global economy.
The lower global growth in the first half of 2015 than seen in the second half of 2014 is reflective this state of affairs, the IMF noted.
Weaker exports and sluggish domestic demand were the key factors dragging on advanced economies, while in emerging economies the slowdown reflects ongoing adjustment after the credit crisis, together with fallout from declining commodity prices, geopolitical tensions, and armed conflicts.
Other areas of concern for the IMF include potential adverse corporate balance sheet and funding challenges related to dollar appreciation, capital flow reversals, and disruptive asset price shifts.
The IMF also warned that a ‘simultaneous realisation’ of some of the downside risks around the world would imply a ‘much weaker outlook’.
