IMF lowers growth outlook

The International Monetary Fund said Tuesday global growth would come in at 3.1 percent for the current year, down from its previous estimate of 3.3 percent.

The IMF's director of research and the organization's chief economist, Maurice Obstfeld, said he saw highly industrialized nations recovering somewhat in 2015, while emerging economies had to grapple with a slowdown of their production activities.

For next year, the IMF's latest World Economic Outlook penciled in a 3.6 percent expansion of gross domestic product worldwide.

Overhaul of China economy

The IMF said future developments would hinge on the large-scale restructuring of the Chinese economy and the expected normalization of US monetary policy.

Obstfeld noted that China was currently at pains to lessen its dependence on exports by strengthening domestic consumption and the service sector even at the cost of a temporary economic slowdown in the world's second largest economy.

Falling commodity prices

The IMF report warned that falling commodity prices had not only had an impact on advanced producers such as Australia, Canada or Norway. Obstfeld pointed to the devastating effect the downward price spiral had in many emerging economies and developing nations, with that group of countries already accounting for more than half of global economic output.

He called on those nations to continue on the path of reforms and improve conditions for foreign investors.

Turning to industrialized nations, the authors of the report said too many nations were still struggling with the aftermath of the global financial crisis, calling on central banks to keep loose monetary policies for the time being wherever possible to facilitate infrastructure and modernization projects, and with it, employment.

hg/cjc (dpa, Reuters)