Global economies — advanced and otherwise — are looking up, according to the International Monetary Fund. But the incoming growth that the organization foresees will happen on perilous ground.
Economic output worldwide will increase 3.5% in 2012 before surging 4.1% the year after, according to the IMF’s forecast, which improved its outlook from January. But unemployment will stay high and the specter of rising oil prices will continue to hover, the report found.
New policies implemented by established markets have “reduced the threat of a sharp global slowdown” and will help them achieve a “weak recovery,” according to the IMF’s World Economic Outlook. Advanced economies are set for a 1.4% expansion in 2012 — though that’s less than half the 3.2% growth rate of 2010.
In emerging and developing markets, activity will remain “relatively solid” with a 5.7% boost, though retreating a bit from the 6.2% growth achieved last year.
The “recent improvements are very fragile,” according to Tuesday’s report.
“For the past six months we’ve been on a roller coaster ride,” said IMF Chief Economist Olivier Blanchard in a statement. “Our baseline is that growth is going to be slow in advanced economies; sustained, but not great, in emerging market and developing economies.”