The IMF has yet again lowered its forecast for global growth to 2.9% in 2013 (previously 3.2%) and 3.6% in 2014 (previously 3.8%)

The IMF has yet again lowered its forecast for global growth to 2.9% in 2013 (previously 3.2%) and 3.6% in 2014 (previously 3.8%). Australia's growth outlook has been downgraded by half a percentage point in each year since its April forecasts, to 2.5% in 2013 and 2.8% in 2014. That is roughly in line with Treasury and RBA forecasts. However, the IMF warns that the cut in China's projected growth rate from its historical average of 10% to its new target of 7.5% will slow Australia's future growth more than that of any other trading partner, except Mongolia. By 2025, it estimates, Australia's GDP will be 3% less than it would have had China remained on its old growth path. That implies a reduction of about 0.25 percentage points a year in our baseline growth. (VIEW LINK)