An unexpectedly stubborn euro zone recession and weakness in Japan will weigh on global economic growth this year before a rebound in 2014 that should deliver the fastest expansion since 2010, Reuters quoted the International Monetary Fund as saying on Wednesday. The IMF trimmed its 2013 forecast for global growth to 3.5 percent from the 3.6 percent it projected in October, but said it looked for a 4.1 percent expansion in 2014 if a recovery takes a firm hold in the euro zone. It said the world economy grew 3.2 percent last year. Healthy global growth rates of above 4 percent were last seen in 2010, when output expanded 5.1 percent as the global financial crisis eased. "Optimism is in the air, particularly in financial markets, and some cautious optimism may indeed be justified," IMF chief economist Olivier Blanchard said at a news conference. "Comparing to where we were at the same time last year, acute risks have decreased," he said, noting that Washington had largely dodged its so-called "fiscal cliff" and that policy actions in Europe had helped calm the region's debt crisis. Still, the IMF warned that big downside risks remained, including the possibility the euro zone's crisis could flare anew and the U.S. Congress could tighten the budget excessively. "We may have avoided the cliffs, but we still face high mountains," Blanchard said. -- SPA
