Fund managing director Christine Lagarde caught commentators
by surprise when she said this week the IMF would revise
upward its global growth forecast in about three weeks.
''We will be revising upwards the global forecast of the
economic growth,'' she told a press conference in Nairobi on
Tuesday, adding it would be premature to reveal any more.
Ms Lagarde, who was wrapping up a two-day visit to Kenya,
gave no reason for the revision.
When it issued its latest World Economic Outlook report in
October, the IMF lowered its forecasts, saying that global
growth ''remains in low gear''.
It said it expected the global economy to grow 2.9%
year-on-year in 2013 and 3.6% in 2014. That represented a
downward revision of 0.3% and 0.2%, respectively, from its
The fact the United States Federal Reserve had started to
change the easy-money policy it had been pursuing had slowed
capital inflows to emerging-market economies as long-term
yields in the US and many other economies had risen, she
Figures out yesterday from the OECD showed annual inflation
in advanced countries picking up to 1.5% in November from
1.3% in the previous month.
The increase was mainly due to an increase in energy prices,
but still left inflation below its 2013 peak of 2% recorded
in July in the 34-nation Organisation for Economic
Co-operation and Development.
Annual inflation jumped to 1.5% in Japan in November, from
1.1% the previous month - its highest rate since October
2008. The rise was seen as further evidence efforts by the
Government and the Japan central bank to break deflation were
In the Eurozone, where there had been concerns about
deflation, annual inflation rose to 0.8% in November from
0.7% in October.
Other signs of an improving global economy include the
falling of borrowing costs for Portugal and Spain, two of the
worst-affected countries during the Global Financial Crisis.
The falling of borrowing costs is seen as a dramatic market
turnaround for debt-laden Eurozone nations whose plight once
raised fears for the bloc's survival.
After years of budget cuts and tough reforms to curb soaring
debt - which unleashed mass protests - fresh hope for the
economic recovery for Portugal, Spain, Ireland and Italy
appeared to have won over buyers in the bond market.
European Central Bank president Mario Draghi urged caution as
the bank held its key interest rate at a record low 0.25%.
''The recovery is there but it is weak, modest and fragile,
meaning there are several risks - financial, economic,
geopolitical, political - that could undermine easily this
recovery,'' he said in Frankfurt.
''It's still premature to declare any victory.''
Falling sovereign yields help boost economies, spilling over
into cheaper loans for business while easing the pressure on
governments to impose tough austerity measures on their