According to the the IMF’s World Economic Outlook (WEO) report, the global economy grew by 2.9 percent in 2013—below the 3.2 percent recorded in 2012—and is expected to rise to 3.6 percent in 2014. Much of the escalation in growth is expected to be driven by advanced economies. Growth in major emerging markets, although still strong, is expected to be weaker than the IMF’s forecast in its July 2013 WEO Update. This is partly due to a natural cooling in growth following the stimulus-driven surge in activity after the Great Recession.
Indeed, these growth transitions, combined with an approaching turning point in U.S. monetary policy, have led to new challenges and risks. In particular, long-term interest rates in the United States and many other economies have increased more than expected. In the United States, growth is expected to rise from 1½ percent this year to 2½ percent in 2014 driven by continued strength in private demand, which is supported by a recovering housing market and rising household wealth.
In the Eurozone, policy actions have reduced major risks and stabilized financial conditions. The region is expected to gradually pull out of recession, with growth reaching 1 percent in 2014.
Overall, growth in emerging markets and developing economies is expected to remain strong at 4,5 –5 percent in 2013–14. Commodity prices will continue to boost growth in many low-income countries, including those in sub-Saharan Africa. But economies in the Middle East and North Africa, Afghanistan, and Pakistan region will continue to struggle with difficult economic and political transitions.