The International Monetary Fund (IMF) has become the latest organisation to cut its forecast for global growth this year.
The IMF has said the impact of expected slowdowns in China, Russia and oil-exporting emerging economies will more than offset the positive impact of the low oil price for oil-importing nations.
The organisation has reduced its prediction for global GDP growth in 2015 to 3.5 per cent, down 0.3 percentage points from the 3.8 per cent growth the IMF predicted in October.
The predicted growth in 2016 has also been revised down by 0.3 percentage points to 3.7 per cent.
In spite of the downgrade, growth of 3.5 per cent this year will still be higher than the 3.3 per cent currently expected for 2014.
The IMF said it was lowering its growth forecast because “even with the sharp oil price decline - a net positive for global growth - the world economic outlook is still subdued”.
The growth forecasts from the IMF are still much more optimistic than those of the World Bank, which last week also cut its forecasts for 2015 and 2016 growth, to 3 per cent then 3.3 per cent.
The main reductions on the IMF’s forecast have come from China, where it now expects GDP growth to be below 7 per cent in 2015, and in Russia, where the oil price impact and geopolitical tensions have led the IMF to forecast a contraction of 3 per cent this year.
However, the IMF said the risks to its prediction were more balanced than in its October update, when it said the most likely risk to its growth forecast was to the downside, and that it was now equally possible that growth could undershoot or overshoot its new forecast.
