Confirming the warnings expressed by the global labour movement and many other critics of the austerity policies promoted by the IMF and other institutions, the Fund yesterday sharply reduced growth forecasts for several countries and regions.

In an update of its regular World Economic Outlook publication, the IMF slashed growth forecasts most sharply for the emerging-market "BRICS" countries.

The revisions posted today were made to the last detailed forecasts issued by the Fund only three months ago in April.

Growth rates for Russia were reduced by 0.9 percentage points in 2013 and by 0.5 percentage points in 2014; for China by 0.3 percentage points in 2013 and 0.6 points in 2014; for Brazil by 0.5 points in 2013 and 0.8 points in 2014; and for South Africa by 0.8 points in 2013 and 0.4 points in 2014. GDP growth in 2013 would fall well below 3 per cent in three of these BRICS and under 8 per cent in the case of China, which would be the slowest growth rate for that country since the 1990s.

The IMF slashed the euro-area growth rate a further 0.2 percentage points, for a 2013 annual rate of -0.6 per cent in 2013, thus confirming that the zone will be in recession for the second year in a row.

The steepest downward revisions were made for Germany (down 0.3 points to +0.3 per cent) and Italy (down 0.3 points to -1.8 per cent).

The US growth forecast, affected by the "sequestration" budget cuts, has been reduced by 0.2 percentage points to +1.7 per cent for 2013. In contrast, the IMF revised upwards by 0.5 percentage points its GDP forecast for Japan (to +2.0 per cent in 2013), a country where a new government has applied fiscal and monetary stimulus policies since late last year.

The IMF’s three-page World Economic Outlook update is available in English and six other languages here:
http://www.imf.org/external/pubs/ft/weo/2013/update/02/