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From VOA Learning English, |
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this is the Economics Report. |
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The world economy is not growing as fast |
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as many experts had hoped. |
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The International Monetary Fund |
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recently announced it was changing |
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its prediction for future economic activity. |
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The IMF now says it expects the world economy |
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to grow only a little over 3 percent in 2013, |
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that is down from an earlier prediction of 3.3 percent. |
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The IMF blamed the slower growth in part on what it called |
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"continuing growth disappointments" |
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in developing countries, |
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and a deeper than expected recession in Europe. |
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Olivier Blanchard is the chief economist at the IMF. |
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"The main effect really comes from the slowdown |
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in emerging market economies, |
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but we are also revising down the euro area forecast." |
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International demand for goods and services |
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has decreased as people buy less, |
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that is especially true in Europe. |
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There a debt crisis and government cost-cutting measures |
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have produced the longest economic slowdown |
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in the history of the 17-nation eurozone. |
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Peter McGuire studies Asia markets |
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for the financial service company, Baxter FX. |
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"It is not surprising. |
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When you think about as far as global demand, |
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that seems to be softening, |
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and of course with Europe in the position that it's been in, |
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it's just protracted slowness to a point of |
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nearly negative growth across the whole zone." |
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Reduced demand has slowed growth in faster-growing economies, |
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especially in the countries known as BRIC |
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- Brazil, Russia, India, and China. |
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Olivier Blanchard says economic activity in the BRIC countries |
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has an affect on more developed economies. |
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"If, for example, growth in BRICs was to go down |
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by two percent relative to what we predict, |
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then the effect on the U.S., |
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for example, would be half a percent. |
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So it matters." |
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The IMF has lowered its expectations |
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for economic growth in the United State. |
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Yet recent reports on American housing and employment |
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have suggested slow but steady growth. |
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This growth has been strong enough |
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for America's central bank to change monetary policies |
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that have kept long-term interest rates at record-low level. |
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Olivier Blanchard says rising American interest rates |
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could create difficulties for some countries, |
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but he believes it would also be evidence of the stronger recovery |
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for the world's largest economy. |
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"Along the way, you may have quite a bit of volatility, |
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but on that, the bottom line remains the same, |
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which is - it's good news for the world." |
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The International Monetary Fund is predicting improvements |
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in the world economy next year. |
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But the IMF says the improving conditions are possible, |
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only if major economies cut long-term debt |
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and support policies that aid near-term growth. |
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And that's the Economics Report from VOA Learning English, |
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I'm Bob Doughty. |
