The world has not yet recovered totally from the 2009 global crisis it has often been stated, now the IMF has said that due to the stronger advanced economies, which are the US and the UK, both were likely to raise interest rates, with the first increase expected in UK for either late 2015 – 2016.
Obstfeld said, “Recovery is most advanced in the US and the UK, where monetary policy looks likely to tighten soon, but is more tentative in the euro area and Japan,”
The WEO accepted that the IMF has been consistently over-optimistic in its predictions for the global economy. “Growth has fallen short of forecasts over the past four years.”
“The main medium-term risk for advanced economies is a further decline of already-low growth into near stagnation, particularly if global demand falters further as prospects weaken for emerging market and developing economies.” the WEO said. “In this context, persistently below-target inflation could become more entrenched.”