Managing director of the International Monetary Fund (IMF), Rodrigo de Rato, has predicted that the global economy will remain robust throughout 2007.
Speaking at the IMF annual press conference, de Rato said that after four years of strong growth, the IMF expects that global growth will remain solid in 2007, approaching 5%.
He added that: “This represents a very significant expansion of the global economy and probably the longest – if not the longest, one of the longest – sustained periods of growth in the post-Bretton Woods era, that is, after the Second World War.
“In that respect, while the US economy has slowed down in large part because of the continued weaker housing market, what I can say now is that a soft landing seems more sure as lower energy prices have supported employment growth and consumption. Also, we see the decrease in the housing market to be bottoming out.
“At the same time, and this is an important issue that makes comparison with 2000 different, spill-over to other economies from a slower US growth have been minimal.
“Economic recovery in Europe has broadened at the same time as we were seeing the US slow down, and growth in Japan is broadly on track after an earlier soft patch.”
De Rato added that the expansion in emerging markets continues with very strong expansion in India and China.
He also said that downside risks to the global scenario put forward are less threatening than they were a few months ago, partly because declining oil prices have eased inflation and that has reduced risk on growth.
In October, the National Institute of Economic and Social Research said that the UK economy is set to grow at or just above 2.5% per annum in 2006 and 2007 (see UK Economy Set To Grow At 2.5%).
Meanwhile, in December, OPera Media forecast that global economic growth will remain robust at 4.9% for 2007, although inflationary pressure in advanced economies is the key downside risk to this (see Global Economic Growth To Remain Robust In 2007).
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