IMF sees slower growth as economy adjust to lower commodity prices

In IMF's World Economic Outlook published yesterday ahead of the IMF/World Bank annual meetings in Lima.

"Global growth for 2015 is projected at 3.1%, 0.3pp lower than in 2014, and 0.2pp below the forecasts in the July 2015 update. The institution forecasts 3.6% for 2016", notes Barclays. 

Prospects across the main countries and regions remain uneven. Relative to last year, the recovery in advanced economies is expected to pick up slightly, while activity in emerging market and developing economies is projected to slow for the fifth year in a row, primarily reflecting weaker prospects for some large emerging market economies and oil-exporting countries. 

In an environment of declining commodity prices, reduced capital flows to emerging markets and pressure on their currencies, and increasing financial market volatility, downside risks to the outlook have risen, particularly for emerging market and developing economies. 

The IMF expects growth of 1.5% and 1.6% this year and next for the euro area, and 2.5% and 2.2% respectively for the UK, added Barclays.