• The IMF has revised down its forecasts of world growth, particularly for advanced economies.
• Its Australian forecasts have also been downgraded, to 1.8% in 2011 (from 3.0% in April – catch up after weaker than expected GDP in H1) and 3.3% in 2012 (from 3.5%).  For 2011 NABs forecast is 1.9%, not materially different from the IMF but we expect stronger growth in 2012 of 4.1% (IMF 3.3%).  We suspect we have a stronger boost from coal mining in 2012, as flooded mines come back on stream.
• World growth is still expected to be an above trend 4% in both 2011 and 2012 – a slightly more optimistic outlook than we are projecting. Within this overall forecast there is considerable divergence. Only weak growth is expected for many advanced economies (e.g. US, Euro-zone), but still generally robust growth for emerging and developing economies.
• The IMF considers risks are mainly on the downside. Risks include European sovereign debt (and impact on a fragile banking system), weak policy response, further supply disruptions to commodity markets and overheating risks in some emerging economies.
• If these risks were to play out, the United States and Euro-zone could easily move into recession, and growth would slow in other regions.

For further analysis download the full report.

• IMF World Economic Outlook – September 2011 (PDF, 181kb)