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Global economy grows at slowest pace since financial crisis, NIESR predicts

Xinhua, August 5, 2015 Adjust font size:

The world economic growth would slow this year to the lowest rate since the financial crisis, the National Institute of Economic and Social Research (NIESR) said Wednesday.

The economic research institution downgraded global economic forecasts for 2015 and 2016. The 2015 and 2016 forecasts were revised down by 0.2 and 0.3 percentage points respectively, to 3.0 and 3.5 percent.

NIESR said global growth this year is now forecast to be the slowest for any year since the crisis, reflecting a trend of weakening growth in many emerging market economies as well as hesitant recoveries in the advanced economies.

It cut growth forecasts for the U.S. and a number of emerging market economies in Asia and Latin America.

While the Greek crisis has been the main preoccupation of eurozone policymakers, the growth forecast for the euro area has been lowered only slightly, the think tank added.

Its prospects for Britain economy was unchanged at 2.5 percent this year.

NIESR said global growth might be boosted by delayed effects of lower oil prices, as well as by accommodative monetary policy and slower fiscal consolidation, but considerable risk remains.

The institution noted that the Greek economy is a key risk to global growth.

"More fundamentally, 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," said NIESR. Endit