Activity in global economy less than expected

Global economic activity should strengthen in the second half of this year and accelerate in 2015, although momentum could be weaker than expected, IMF chief Christine Lagarde said yesterday, hinting at a slight cut in the Fund’s growth forecasts.

Ms Lagarde said central banks’ accommodative policies could have only limited impact on demand and that countries should also act to boost growth by investing in infrastructure, education and health, provided their debt stays sustainable.

The IMF’s update of its global economic outlook, expected later this month, will be “very slightly different” from the forecasts published in April, she said. Then, the IMF had forecast that global output would grow by 3.6% in 2014 and 3.9% in 2015.