The Slow-Growth World

The IMF is forecasting slower growth in the years ahead, which means investors should not be expecting anything stellar anytime soon

Jeremy Glaser 13 November, 2012 | 6:00AM
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In October, the International Monetary Fund released its World Economic Outlook and the take was hardly rosy. The organisation expects the world's gross domestic product (GDP) to grow by only 3.3% this year and 3.6% in 2013. This is down from 5.1% in 2010 and 3.8% in 2011. Worse yet, these estimates assume that there is no escalation in the eurozone crisis and that the US manages to avoid the brunt of the fiscal cliff. Given the problems facing the global economy, we may have to get used to this slow growth for some time.

Dark Clouds Have Arrived
The picture in Europe is the grimmest. Output from the eurozone is almost certainly going to contract in 2012, and growth in 2013 will be a mere 0.2%. The IMF thinks that the big economies such as Germany and France will likely escape a contraction, but the peripheral nations like Spain and Italy could very well see years of shrinking output.

The really scary numbers are on the employment front. Eurostat pegs the eurozone's unemployment rate at a staggering 11.6%. Spain stands at 25.8% with Greece not far behind at 25.1%. Youth unemployment numbers north of 50% in Greece and Spain are hard to even wrap your head around. Germany is in much stronger shape in terms of employment, with a steady jobless rate around 5.4%.

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Jeremy Glaser  is markets editor for, the sister site of