NIESR downgrades global economic forecasts for 2015 and 2016
The world economy is expected to grow at its slowest rate since the economic crisis, the National Institute of Economic and Social Research (NIESR) said
NIESR forecasts global economies to grow by 3% this year and 3.5% next year, due to slower emerging market economies and hesitant recoveries in most developed countries.
The previous forecasts released in May were of 3.2% for 2015 and 3.8% for 2016.
As a result, it downgraded its growth forecasts for the US and several emerging market economies in Asia and Latin America.
On the bright side, growth forecast for the Eurozone has been lowered "only slightly" as the threat of deflation has receded.
Furthermore, NIESR expects the US Federal Reserve to raise its funds rate in September this year, followed by the with the Bank of England in February 2016.
Greece is seen as one of the key risks to the global economy as the Greek crisis has "highlighted shortcomings of the Euro Area’s institutional arrangements, and revived doubts about whether Europe’s monetary union can succeed without deeper economic, fiscal, and political integration than is currently envisaged", its review report said.
A gradual slowing of growth in the Chinese economy is also worring, with the authorities’ recent interventions in the equity market likely to discourage participation in the market and reduce confidence, more broadly, in the government’s market-oriented reform strategy, the report added.