WASHINGTON, Sept 20, (Agencies): The global economy is much weaker than believed just months ago, and growth will pick up only slightly next year, the International Monetary Fund said Tuesday.
The IMF lowered its growth forecasts for the global economy to 4.0 percent for 2011 and 2012, saying activity had “weakened significantly,” but warned of a return to recession if Western leaders fail to get their economies back on track.
“The evidence points to continued, uneven growth,” the IMF said in a twice-yearly outlook report.
The global economy, which rebounded in 2010 following the 2008-2009 Great Recession, has been dragged down by problems in the advanced countries, particularly the United States and the eurozone, it said.

MENA
The International Monetary Fund said Tuesday that social unrest and oil prices fluctuations were causing large uncertainties in the economies of the Middle East and North Africa.
It slightly cut its growth forecast for the region by 0.1 percentage point to 4.0 percent, in its quarterly World Economic Outlook.
“Commodity price movements and social unrest continue to shape the region’s experience and prospects,” the IMF said .
“The short-term outlook is still subject to unusually large uncertainties, stemming mainly from the fluid political and security situation in some MENA economies as well as growing uncertainty about external demand,” it said.
In other oil-exporting MENA countries, the IMF expected growth this year to be at 3.3 percent in the United Arab Emirates, 5.7 percent in Kuwait, 9.6 percent in Iraq, 2.5 percent in Iran, and 2.9 percent in Algeria. Sudan’s GDP is seen contracting by 0.2 percent, excluding South Sudan, which became independent this year.

The MENA region covered by the IMF report stretches from Iran to Mauritania. The current report, however, has excluded oil-rich Libya due to insufficient data.
The report also did not provide separate figures on Yemen, the impoverished nation hit since January by ongoing protests demanding the ouster of President Ali Abdullah Saleh.
The IMF forecasts growth in oil-exporting countries, including Iran, to reach five percent this year and drop slightly to about four percent in 2012, as uncertainty over the global economy prevails.
Qatar will continue to lead the economic expansion in this category on the back of its growing natural gas exports, as well as Iraq and Saudi Arabia.

However, growth in Qatar this year has been slightly revised down from 20 percent forecast in April to 18.7 percent. The pace of expansion in the tiny energy-rich Gulf state is expected to narrow sharply to 6.0 percent in 2012.
The forecast for Saudi Arabia’s economic growth in 2011 has also been cut from 7.5 percent forecast in April to 6.5 percent. The largest Arab economy is expected to grow by 3.6 percent next year.
Oil importers, mainly those hit by a wave of pro-democracy uprisings over the past months, will continue to have a subdued outlook, the IMF said. It put overall growth forecast for this category at 1.4 percent this year, down from 4.5 percent in 2010.

“Activity in a few economies will be constrained by domestic social unrest and an associated slow recovery in tourism receipts and remittances,” it said.
The IMF expected, however, growth for oil-importing countries to increase to 2.5 percent next year, “underpinned by a slow recovery in investment.”
The IMF slightly raised its forecast for Egypt’s growth this year to 1.2 percent from 1.0 percent forecast in April. The economy of the most populated Arab country is expected to grow by 1.8 percent next year.

The Tunisian economy will not grow at all this year, according to the IMF.
But the North African nation, which triggered in December a wave of Arab protests in what became known as the “Arab Spring,” and ousted president Zine El-Abedine bin Ali, should see its economy expanding by 3.9 percent next year, compared to 3.1 percent in 2010, the IMF said.
Meanwhile, the economy of Syria, hit by European sanctions and a wave of pro-democracy uprising that has left at least 2,600 dead, will contract by 2.0 percent this year, the IMF said.
Syria had posted growth of 3.2 percent in 2010, but protests that erupted in February against the regime of President Bashar al-Assad have triggered international pressure, and deprived the country of a vital inflow of tourists.
The Fund said the outlook for the whole MENA region was “subject to large downside risks.”

US/Europe
The International Monetary Fund has sharply downgraded its outlook for the US economy through 2012 because of weak growth and concern that Europe won’t be able to solve its debt crisis.
The international lending organization expects the US economy to grow just 1.5 percent this year and 1.8 percent in 2012. That’s down from its June forecast of 2.5 percent in 2011 and 2.7 percent next year.
The IMF has also lowered its outlook for the 17 countries that use the euro. It predicts 1.6 percent growth this year and 1.1 percent next year, down from its June projections of 2 percent and 1.7 percent, respectively.
The gloomier forecast for Europe is based on worries that Greece will default on its debt and destabilize the region.

“Fear of the unknown is high,” said Olivier Blanchard, the IMF’s chief economist. “Strong policies are urgently needed to improve the outlook and reduce the risks.”
The US economy grew at an annual rate of just 0.7 percent in the first six months of the year. And the US unemployment rate has stayed above 9 percent for all but two months since the recession officially ended two years ago.
Financial turmoil and slow growth are feeding on each other in both the United States and Europe, IMF officials say. Europe’s debt crisis is causing banks to reduce lending and hold onto cash. Sharp stock market drops in the United States over the summer have hurt consumer and business confidence and will likely reduce spending. That slows growth, which leads many investors to shift money out of stocks and into safer investments, such as Treasury bonds. In Europe, slower growth will make it harder for stressed nations to get their debt under control.
US and European policymakers need to act more decisively to cut budget deficits, the IMF said. And European officials need to ensure that the region’s banks have enough capital to withstand the debt crisis.
The IMF said in its report that the US economy faces longer-lasting problems that go beyond high gas prices and disruptions caused by the Japan crisis.

Emerging Europe
Europe’s 14 emerging economies will grow by 4.3 percent this year, down narrowly from 4.5 percent in 2010, and lose pace further in 2012 at 2.7 percent, the IMF said Tuesday.
“Many central and eastern European (CEE) economies are enjoying a fairly strong rebound from their deep recessions,” the International Monetary Fund said in its World Economic Outlook.
The region could be threatened by trouble in the eurozone however.
“Although CEE economies’ direct trade and financial exposure to the euro area periphery is limited, an escalation of sovereign debt and financial sector troubles to the core euro area would undermine growth in emerging Europe, given tight financial and economic linkages,” it said.
The countries in the IMF’s emerging Europe bracket are European Union nations Bulgaria, Hungary, Latvia, Lithuania, Poland and Romania; 2013 entrant Croatia; and would-be members Albania, Bosnia and Herzegovina, Kosovo, Macedonia, Montenegro, Serbia and Turkey.

Asia
Asia’s resilient economies are on a strong growth track, but must build up demand from their newly affluent consumers to offset shrinking exports to the crisis-hit West, the IMF said Tuesday.
The twice-yearly IMF report envisaged a modest slowdown in China, and said Japan would contract this year but bounce back in 2012 as reconstruction from its March 11 disasters begins to trickle through and sentiment picks up.
Asia’s exports have eased with the key markets of the United States and Europe consumed by debt crises, although the Fund said accommodative policies by several governments had lifted demand at home.
It said that while developing economies would expand this year, led by China and India, growth would slow in 2012 while more needed to be done to lessen the region’s reliance on external trade.
“Growth is expected to remain strong, with weaker external demand offset by still-solid domestic demand.
The IMF downgraded its forecast for gross domestic product in China — the world’s second largest economy — to 9.5 percent in 2011 and 9.0 percent in 2012, after double-digit growth for most of the past decade.

But China’s long battle to bring prices down would eventually pay off, it said.
It gave an upbeat outlook for Japan next year, despite the impact of a strong yen, predicting a strong reverse from this year thanks to a huge rebuilding programme after the March earthquake-tsunami disasters.
“Reports from Japan confirm a rapid recovery in both output and domestic spending. Industrial production is now growing rapidly, business sentiment is improving sharply, and household spending is recovering quickly.”
The report said Japan’s economy would shrink 0.5 percent over the whole of 2011, slightly less than the 0.7 percent forecast by the IMF in June, and hit 2.3 percent in 2012.
The IMF, however, warned that Tokyo should bring down its huge public debt, which at approximately 200 percent of GDP is the industrialised world’s biggest and has led to several credit downgrades.

Lat/Am
Latin America and the Caribbean will experience strong economic growth of 4.5 percent this year and 4.0 percent in 2012 thanks largely to commodity exports and despite slow global growth, the IMF said in its annual forecast Tuesday.
The International Monetary Fund slightly decreased its 2011 growth forecast for the region — down from the 4.6 percent predicted in June — but maintains a positive outlook, with variations by countries.
The forecast comes on the day the IMF reported that the global economic recovery is slowing, and projected world growth of 4 percent in both 2011 and 2012, down from over 5 percent in 2010.

Africa
The economy of sub-Saharan Africa will grow by more than five percent this year and next as the region posts a “solid” performance, the International Monetary Fund said Tuesday.
In its latest outlook the IMF said growth would reach 5.2 percent this year and 5.8 percent in 2012.
“The SSA region is showing solid macroeconomic performance, with many economies already growing at rates close to their pre-crisis averages,” said the forecast.
“The global slowdown has not significantly affected the region thus far, but downside risks have risen,” it said.
The figures have been revised down slightly from June however when the forecast stood at 5.5 percent and 5.9 percent, respectively.
Growth in the region dropped to 2.8 percent in 2009 due to the economic crisis but stood at 5.4 percent last year.
The IMF said most of the region’s low-income countries had been largely shielded from the global financial crisis “owing to their limited integration into global manufacturing and financial networks.”

The IMF meanwhile projected South African growth of 3.4 percent and 3.6 percent in 2011 and 2012, respectively.
It marks a recovery from negative -1.8 percent in 2009 and 2.8 percent last year.
The growth will be driven by private consumption and revived investment, supported by low interest rates and the renewal of mining licences, the IMF said.
Oil exporting countries such as Nigeria and Angola can hope for an average six percent growth this year, rising to 7.25 percent in 2012, despite lower than projected oil prices.
The forecast reflects the strength in domestic public investment spending in the countries, the IMF said.
Ghana with its newly found oil wealth can expect growth of 13.5 percent this year, while Ivory Coast, recovering from the months-long violence that followed its November elections, received a negative forecast of -5.8 percent.
The IMF said it expected a return to regular economic activity in Ivory Coast in 2012 with a net growth rebound of 8.5 percent.

Table of IMF growth forecasts

WASHINGTON, Sept 20, (AFP): Here are the International Monetary Fund’s latest economic growth projections for 2011 and 2012, released Tuesday in Washington.
The numbers represent the year-over-year growth rate, by percent change, and those in parentheses represent the difference in percentage points from IMF projections made in June 2011.

GDP growth 2011 2012
World 4.0 (-0.3) 4.0 (-0.5)
Advanced economies 1.6 (-0.6) 1.9 (-0.7)
United States 1.5 (-1.0) 1.8 (-0.9)
Japan -0.5 (0.2) 2.3 (-0.6)
Eurozone 1.6 (-0.4) 1.1 (-0.6)
Germany 2.7 (-0.5) 1.3 (-0.7)
France 1.7 (-0.4) 1.4 (-0.5)
Italy 0.6 (-0.4) 0.3 (-1.0)
Spain 0.8 (0.0) 1.1 (-0.5)
Britain 1.1 (-0.4) 1.6 (-0.7)
Canada 2.1 (-0.8) 1.9 (-0.7)
Emerging and developing economies 6.4 (-0.2) 6.1 (-0.3)
Developing Asia 8.2 (-0.2) 8.0 (-0.4)
China 9.5 (-0.1) 9.0 (-0.5)
India 7.8 (-0.4) 7.5 (-0.3)
Latin America and the Caribbean 4.5 (-0.1) 4.0 (-0.1)
Brazil 3.8 (-0.3) 3.6 (0.0)
Mexico 3.8 (-0.9) 3.6 (-0.4)
Central and Eastern Europe 4.3 (-1.0) 2.7 (-0.5)
Russia 4.3 (-0.5) 4.1 (-0.4)
Middle East and North Africa 4.0 (-0.2) 3.6 (-0.8)
Sub-Saharan Africa 5.2 (-0.3) 5.8 (-0.1)