[00:00.100]From VOA Learning English,
[00:02.150]this is the Economics Report.
[00:05.080]The world economy is not growing as fast
[00:08.620]as many experts had hoped.
[00:10.970]The International Monetary Fund
[00:14.250]recently announced it was changing
[00:16.500]its prediction for future economic activity.
[00:20.780]The IMF now says it expects the world economy
[00:25.900]to grow only a little over 3 percent in 2013,
[00:31.870]that is down from an earlier prediction of 3.3 percent.
[00:38.390]The IMF blamed the slower growth in part on what it called
[00:44.220]"continuing growth disappointments"
[00:46.910]in developing countries,
[00:48.410]and a deeper than expected recession in Europe.
[00:53.450]Olivier Blanchard is the chief economist at the IMF.
[00:58.980]"The main effect really comes from the slowdown
[01:01.320]in emerging market economies,
[01:03.060]but we are also revising down the euro area forecast."
[01:07.700]International demand for goods and services
[01:10.440]has decreased as people buy less,
[01:14.750]that is especially true in Europe.
[01:17.750]There a debt crisis and government cost-cutting measures
[01:22.590]have produced the longest economic slowdown
[01:25.570]in the history of the 17-nation eurozone.
[01:29.800]Peter McGuire studies Asia markets
[01:32.990]for the financial service company, Baxter FX.
[01:37.370]"It is not surprising.
[01:38.690]When you think about as far as global demand,
[01:42.120]that seems to be softening,
[01:43.420]and of course with Europe in the position that it's been in,
[01:46.700]it's just protracted slowness to a point of
[01:49.550]nearly negative growth across the whole zone."
[01:53.000]Reduced demand has slowed growth in faster-growing economies,
[01:57.030]especially in the countries known as BRIC
[02:00.630]- Brazil, Russia, India, and China.
[02:05.210]Olivier Blanchard says economic activity in the BRIC countries
[02:10.490]has an affect on more developed economies.
[02:13.830]"If, for example, growth in BRICs was to go down
[02:18.210]by two percent relative to what we predict,
[02:20.810]then the effect on the U.S.,
[02:23.450]for example, would be half a percent.
[02:25.290]So it matters."
[02:26.930]The IMF has lowered its expectations
[02:30.290]for economic growth in the United State.
[02:33.070]Yet recent reports on American housing and employment
[02:37.860]have suggested slow but steady growth.
[02:41.790]This growth has been strong enough
[02:44.630]for America's central bank to change monetary policies
[02:49.020]that have kept long-term interest rates at record-low level.
[02:54.450]Olivier Blanchard says rising American interest rates
[02:59.930]could create difficulties for some countries,
[03:02.820]but he believes it would also be evidence of the stronger recovery
[03:07.950]for the world's largest economy.
[03:11.030]"Along the way, you may have quite a bit of volatility,
[03:14.630]but on that, the bottom line remains the same,
[03:18.230]which is - it's good news for the world."
[03:20.020]The International Monetary Fund is predicting improvements
[03:24.500]in the world economy next year.
[03:27.000]But the IMF says the improving conditions are possible,
[03:31.830]only if major economies cut long-term debt
[03:36.610]and support policies that aid near-term growth.
[03:41.640]And that's the Economics Report from VOA Learning English,
[03:48.030]I'm Bob Doughty.