IRISH ECONOMIC growth is set to decelerate from 5.3 per cent in 2007 to 1.8 per cent this year, before rebounding to 3 per cent in 2009, the International Monetary Fund (IMF) forecasts in its latest assessment of the global economic outlook, published yesterday. Paul Tansey, Economics Editor, reports.
The report also finds that economic growth in the US is evaporating. The IMF has cut its forecast for US growth in 2008 by a full percentage point since January, with projected real GDP growth in 2008 now revised from 1.5 per cent to 0.5 per cent.
Moreover, the IMF anticipates that a US recovery will be slow to materialise. It has reduced its 2009 growth forecast for the US from 1.8 per cent to 0.6 per cent. As a result, the IMF concludes that the US economy "will tip into a mild recession in 2008".
At a global level, over the past three months the IMF has pruned back severely its forecasts for international economic growth, with the advanced industrial economies taking the hardest hit.
The intensification of the global financial crisis has caused the IMF to cut its 2008 forecast for economic growth in the advanced economies from 1.9 per cent to 1.3 per cent in the past three months. Projections for 2009 have also been pared back. In January, the IMF was forecasting that the advanced economies would expand by 2.1 per cent next year.
Forecast growth in the industrial world in 2009 has now been reduced to 1.3 per cent. The IMF expects that the rate of unemployment in the Republic - the numbers out of work as a percentage of the labour force - will climb from 4.6 per cent in 2007 to 5.3 per cent this year.