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IMF cuts global growth estimates as global economic recovery increasingly uneven

FXStreet (Łódź) - The International Monetary Fund published an update of its semi-annual World Economic Outlook report on Tuesday in which it suggested that global growth remains lackluster, uneven and subject to downside risks.

The organization lowered its global growth projections to 3.3% from 3.4% for 2014 and to 3.8% from 4% for 2015. IMF chief economist Olivier Blanchard explained this was due to concerns over the "very different evolutions" of the economic recovery in different countries.

The US and the UK were mentioned as the countries with robust growth prospects, which can't be said about the Eurozone threatened with a 30% chance of deflation and a 40% risk of recession in 2015. The GDP estimate for the area was cut to 1.3% from 1.5%. Olivier Blanchard suggested that ECB's ABS program could boost credit to small and medium businesses though.

He also urged Japan to make more efforts on fiscal consolidation in order to prop up growth and carry on with the expansionary monetary policy. China on the other hand was seen among the economies which performed well and posted considerable growth.

Generally, the main threats to global growth are in IMF's view the faltering Eurozone recovery, growing geopolitical tensions and central bank's starting to tighten their monetary policies. Therefore countries should continue implementing structural reforms "to re-establish confidence, through a clear plan to deal with both the legacies of the crisis and the challenge of low potential growth."

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