1. Wide shot, IMF officials before briefing on World Economic Outlook
2. Med shot, photographers
3. SOUNDBITE (English) Olivier Blanchard, Chief Economist, IMF:
“The recovery from the crisis continues. I think that’s a fact, an important one. But, too slowly. And, while the focus this time is more on emerging market economies, the legacies of the crisis are still very much present. Advanced economies are still not out of the woods. Public debt, and in some cases private debt, remain very high. And fiscal sustainability is not a given.”
4. Cutaway, reporter asking question
5. SOUNDBITE (English) Olivier Blanchard, Chief Economist, IMF:
“If there was a problem lifting the debt ceiling, it could well be that what is now a recovery would turn into a recession or even worse.”
6. Cutaway, IMF officials
7. SOUNDBITE (English) Rupa Duttagupta, Deputy Chief of World Economic Outlook Division, IMF:
“Growth has slowed down quite sharply and a number of domestic factors have played an important role in this regard. On the structural side, we still see investment recovery to be very slow, a lot of supply-side bottlenecks, constraints in the mining sector, in power.”
8. Cutaway, reporter
9. SOUNDBITE (English) Jorg Decressin, Deputy Director, Research Department, IMF:
“We’ve already seen positive growth in the second quarter, growth was indeed higher than what we had expected. And, that’s what has led us to revise up this year. Same thing for France. As we move into next year, we finally see even the periphery also coming out of recession, and the area as a whole growing by one percent. Now, while we’ve made this progress on the activity front, there is still a long way to go to reduce the very high unemployment rates.”
10. Cutaway, reporters
11. SOUNDBITE (English) Olivier Blanchard, Chief Economist, IMF:
“It’s hard to define what a full recovery is. I think a full recovery for me would be a return to unemployment rates which are much lower than what we see today. But even when that happens, there will still be sequels of the long illness, if you want, we’re still going to end with levels of public debt which are going to be high for a long time to come.”
12. Cutaway, reporters
13. Wide shot, briefing ends

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Global growth is still in low gear and the drivers of growth are shifting, says the IMF’s latest World Economic Outlook (WEO) report. The IMF forecasts global growth to average 2.9 percent in 2013, below the 3.2 percent recorded in 2012, and to rise to 3.6 percent in 2014.
Much of the pickup in growth is expected to be driven by advanced economies. Growth in major emerging markets, although still strong, is expected to be weaker than the IMF forecast in its July 2013 WEO Update. This is partly due to a natural cooling in growth following the stimulus-driven surge in activity after the Great Recession. Structural bottlenecks in infrastructure, labor markets, and investment have also contributed to slowdown in many emerging markets.

“The recovery from the crisis continues. I think that’s a fact, an important one. But too slowly. And, while the focus this time is more on emerging market economies, the legacies of the crisis are still very much present. Advanced economies are still not out of the woods. Public debt, and in some cases private debt, remain very high. And fiscal sustainability is not a given,” said Olivier Blanchard, the IMF’s chief economist and head of the Research Department.

Indeed, these growth transitions, combined with an approaching turning point in U.S. monetary policy, have led to new challenges and risks. In particular, long-term interest rates in the United States and many other economies have increased more than expected.

Although the U.S. Federal Reserve recently decided to not slow the pace of its asset purchases yet and capital outflows from emerging markets have subsided somewhat, bond yields remain well above levels of early May. And there is a distinct risk that financial conditions will tighten from their current, still supportive levels.

In the United States, the projections are based on the key assumption that the ongoing shutdown in the federal government will be short-lived and the debt ceiling will be raised on time. Growth is expected to rise from 1 and a half percent this year to 2 and a half percent in 2014 driven by continued strength in private demand, which is supported by a recovering housing market and rising household wealth.

Blanchard warned that a failure to resolve the debt ceiling issue could trigger widespread problems.

“If there was a problem lifting the debt ceiling, it could well be that what is now a recovery would turn into a recession or even worse,” said Blanchard.

Overall, growth in emerging market and developing economies is expected to remain strong at 4 and a quarter–5 percent in 2013–14, supported by solid domestic demand, recovering exports, and supportive fiscal, monetary and financial conditions. Commodity prices will continue to boost growth in many low-income countries, including those in sub-Saharan Africa. But economies in the Middle East and North Africa, Afghanistan, and Pakistan region will continue to struggle with difficult economic and political transitions.

But the IMF steeply cut its forecast for Indian economic growth to 3.8% for 2013. The figure improves to 5.1 percent in 2014.

“Growth has slowed down quite sharply and a number of domestic factors have played an important role in this regard. On the structural side, we still see investment recovery to be very slow, a lot of supply-side bottlenecks, constraints in the mining sector, in power,” said Rupa Duttagupta, Deputy Chief of World Economic Outlook Division.

In the euro area, policy actions have reduced major risks and stabilized financial conditions, although growth in the periphery is still constrained by credit bottlenecks. The region is expected to gradually pull out of recession, with growth reaching 1 percent in 2014.

“We’ve already seen positive growth in the second quarter, growth was indeed higher than what we had expected. And, that’s what has led us to revise up this year. Same thing for France. As we move into next year, we finally see even the periphery also coming out of recession, and the area as a whole growing by one percent. Now, while we’ve made this progress on the activity front, there is still a long way to go to reduce the very high unemployment rates,” said Jorg Decressin, Deputy Director of the IMF Research Department.
Though the IMF said world economies are recovering from the economic crisis, much is left to be done.

“It’s hard to define what a full recovery is. I think a full recovery for me would be a return to unemployment rates which are much lower than what we see today. But even when that happens, there will still be sequels of the long illness, if you want, we’re still going to end with levels of public debt which are going to be high for a long time to come,” said Blanchard.

In Japan, fiscal stimulus and monetary easing under the authorities’ new policy package, the so-called Abenomics, has enabled an impressive rebound in activity. But the expected unwinding of fiscal stimulus and reconstruction spending together with consumption tax hikes will lower growth from 2 percent this year to 1 and a quarter percent in 2014.

In China, growth is projected to decelerate slightly from seven and a quarter percent this year to seven and a quarter percent in 2014. Policymakers have refrained from stimulating activity amid concerns for financial stability and the need to support a more balanced and sustainable growth path.

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IMF/ WORLD ECONOMIC OUTLOOK PRESSER

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