The IMF has cut its forecasts for economic growth in its twice-yearly World Economic Outlook. It expects world GDP to increase by 4% in 2011 and 2012, some 0.3 and 0.5 percentage points lower than previously expected in its June interim forecast. Divergence in growth between the rich and developing economies is expected to become increasingly marked. The predicted output for the 34 advanced economies that account for 52% of the world’s GDP was reduced by 0.6 percentage points to 1.6% for 2011 and by 0.7 points to 1.9% in 2012. Meanwhile, the fund expects the 150 emerging and developing economies to grow by 6.4% in 2011 and by 6.1% in 2012, just 0.2 and 0.3 points lower than in its June forecast.
In August America’s inflation increased to an annualised rate of 3.8%, the highest level since September 2008. Non-farm real average weekly earnings fell by 0.8% in the month, or 1.8% year-on-year.
In the second quarter of 2011, America’s current-account deficit narrowed to $118 billion, $4.5 billion less than forecast. India’s central bank increased interest rates by 25 basis points to 8.25%, the 12th rise in 18 months.
In July the euro-zone trade surplus was €4.3 billion ($6.2 billion), more than double economists’ forecasts but slightly less than the €4.7 billion in July 2010. Exports increased by 5% but imports rose by 6% year-on-year.
Source: The Economist