Archive: IMF - European growth dwarfed by developing countries

Published 28 October 14

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Developing economies set to return to stronger growth

The latest IMF (International Monetary Fund) forecasts suggest that the emerging markets and developing economies are set to return to stronger growth in 2015. The GDP for those countries has been forecast to increase to 5.0% in 2015, up from 4.7% in 2013 and 4.4% in 2014. However, China’s GDP growth is expected to continue to ease, dropping from 7.4% to 7.1%. The increase in the developing economies is largely driven by India, Brazil and Mexico.

Although China’s growth has eased it is still one of the largest economic growth rates in the world. This combined with the increases in other developing countries bodes well for those predictions relating to the long-term demand for dairy products from these regions.

 IMF forecast 10.14

Demand in the Eurozone to remain constrained

The latest IMF forecasts suggest lower than expected growth for the global economy with growth estimates for both 2014 and 2015 revised down, to 3.3% and 3.8% respectively. The weaker than expected figures for global growth are, in part, due to fears that the recovery in the Eurozone could stall, further weakening demand. Growth in the Eurozone has been revised down, showing marginal growth for 2014, before rising to 1.3% for 2015 with countries, including Germany, showing signs of weakness. As well as this, the geopolitical tensions in the Ukraine and Middle East have had a negative impact on investor confidence and raised concerns of falling demand, despite having not yet resulted in higher oil prices.

The UK shows higher growth rates than most European countries, at 3.2%, although this is predicted to slow slightly in 2015 with an expected increase in interest rates. Unemployment is predicted to fall to 6.3% by the end of the year and continue to fall further in 2015, to 5.8%. However, wage increases remain below inflation which is likely to continue to put consumers under financial pressure.