International Monetary Fund has slightly improved its estimate of global economic growth this year from 3.3% forecast in January, to 3.5%, and anticipates a lower contraction of 0.3%, from 0.5 % before, for the euro area. For next year, the Fund expects the world economy to have an advance of 4.1%, slightly higher than 3.9% as expected earlier.
In Euro area, the contraction will be stronger in the first half of the year, about 0.5%, followed in the second half by the beginning of a recovery period. Recession will be mild and short in many advanced economies of Europe, except for countries like Greece or Portugal, Which are implementing joint programs with the EU and IMF. Greek economy will contract this year by 4.7% and Portugal 3.3%. German economy, the largest in the euro area will grow by 0.6% in 2012 and France will be in second place with 0.5% growth. In January, the IMF estimated an advance of only 0.3% for Germany and 0.2% for France. The next two euro area countries by GDP will record contractions. Thus, Italy’s economy will have a decrease of 1.9% and Spain 1.8%. Previous forecasts indicated economic decline of 2.2% for Italy and 1.7% for Spain.
Estimates for Central and Eastern Europe indicate an economic advance of 1.9% this year. In this region, Poland will have the highest growth of 2.6%, followed by Slovakia, 2.4%, Turkey 2.3%, Latvia, Estonia and Lithuania, all three with 2%, Romania, 1.5%, Bulgaria, 0.8%, Serbia, with 0.5%, and the Czech Republic, 0.1%. Hungarian economy will stagnate, while Slovenia will see a contraction of 1% and Croatia 0.5%. In emerging European countries, short-term growth prospects are closely linked to developments in the euro area countries of the center. According to the basic scenario of the IMF, much of the impact of easing in Euro zone late last year has been absorbed and the development of trade and manufacturing activity should accelerate during 2012.
However, the more difficult access to financing due to measures taken by large size banking groups to give up some assets in the region will probably affect credit growth. EU economy will stagnate this year, predicts IMF, the United States will have an increase of 2.1% and Japan 2%. Among the major emerging economies, China will grow by 8.2%, India 6.9%, Russia 4%, and Brazil 3%.
Reply