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IMF lowered the world’s growth forecast – Danske Bank

FXStreet (Edinburgh) - Sverre Holbek, Senior Anayst at Danske Bank, assessed the recent revisions by the IMF.

Key Quotes

“Adding to worries over global growth prospects, the IMF released its latest World Economic Outlook yesterday, in which it lowered its global growth forecast to 3.3% in 2014”.

“The forecast is 0.4 percentage points weaker than envisaged in April, primarily reflecting the weak first half of 2014”.

“While growth is expected to strengthen in advanced economies, this will be driven primarily by the US (3% growth in H2 14). Only a weak recovery is expected in Europe, where the IMF also sees increasing recession risks”.

“According to the IMF the probability has increased to 40% over the next year, largely reflecting lower growth starting points”.

“As risks to its global forecasts, the IMF highlights geopolitics as well as overly optimistic financial markets, which could be under-pricing risk”.

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