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IMF cuts global forecast

The global recovery is likely to gather momentum this year and next, but at a slightly slower pace than appeared likely three months ago, the International Monetary Fund predicted on Wednesday in an update of its forecasts.

Without any signs of an end to the global “two-speed” economy with emerging economies powering ahead while high-income countries languish in the slow lane, the fund called for action to boost confidence and growth in advanced countries. The IMF’s assessment broadly matches the consensus of economists attending the World Economic Forum who are more positive in 2013 than at any point since the crisis started five years ago.

In recent days Christine Lagarde, IMF managing director, has coined a new catchphrase to sum up the institution’s view. “We stopped the collapse, we should avoid the relapse, and it’s not time to relax,” she said last week in a message she will take to business leaders in Davos later on Wednesday.

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