IMF Confident of World
Growth as US Picks up
The
International Monetary Fund will raise its forecast for world growth, Managing
Director Christine Lagarde said, underscoring
confidence in the global recovery as the outlook for the U.S. improves.
A faster-than-expected expansion in the world economy contrasts
with the outlook in October, when the IMF lowered its expectation for the pace
of expansion for 2014. Lagarde said in December the
fund sees “a lot more certainty” for the U.S. economy this year.
The U.S. jobless rate, which fell to 7 percent
in November from 7.3 percent in October, will keep
declining as confidence increases that the economy is on a sustainable growth
path, she said last month. The IMF currently forecasts global expansion of 3.6 percent this year.
Asian stocks climbed on 7 January for the first time this
year. The Federal Reserve said Dec. 18 that it plans to trim its monthly bond
purchases to $75 billion from $85 billion starting in January, taking the first
step toward unwinding the unprecedented stimulus put in place by Chairman Ben
S. Bernanke.
There may be knock-on effects for emerging nations as the
recovery in advanced economies raises the threat of financial market
turbulence, Lagarde said in a Jan. 6 speech to
business leaders in Nairobi.
“As
financial conditions in advanced economies normalize, the risk of heightened
volatility in financial markets may create new challenges in emerging market
economies,” Lagarde said.