IMF's latest World Economic Outlook- Warns Future Threat to Global Growth

In a statement given by IMF chief economist Olivier Blanchard, he said "India has recovered from its relative slump, and, thanks in part to policy and a renewal of (economic) confidence, growth is expected to exceed five percent again.”

This good news is indeed a boost to the country as a whole, which ascertained confidence after the credit outlook was raised to ‘stable’ by Standard & Poor, a research agency, in September.

Coming to the overall performance of countries around the world, the scene is not pretty. WEO released the latest forecast for global growth.

A weak and uneven global economic recovery seems to continue as per the report projections. Global growth is at 3.3 percent for 2014 and is rising to 3.8 percent in 2015. These estimates have been unchanged from 2013. The potential growth rate, which is the annual growth rate expansion without pushing up inflation, is also revised down.

According to Blanchard, the slow global recovery is due to the weak investments across the globe because of underlying factors like legacies of the pre-crisis boom and the subsequent recession, notably high debt burdens and unemployment.

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State of Advanced Economies:

Correspondingly the uneven recovery, growth prospects vary in advanced economies—U.S., Europe, and Japan. Growth here is forecast to rise to 1.8 percent in 2014 and to 2.3 percent in 2015.

Certainly, United States which has shown faster growth, whose employment has been strong and household balance sheets have improved. All thanks to the favorable financial conditions and recovering housing market.

The picture is just the same in Europe as well. Record low long-term interest rates in the core area of Euro area are the indication of the sulking economy. However, a weak and gradual recovery is expected this area.

Japan as well has become the prey of GDP contractions due to consecutive increase in the consumption tax. Decreasing private investment came as a major jolt. Japan being one of the investment driven economies this is a disheartening news.

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