'Global economy prospects downgraded'

London, Aug 3 (IANS) World economy was predicted to grow by 3.1 percent this year as prospects for the global economy have worsened since early May, according to a forecast of the London-based National Institute for Economic and Social Research (NIESR).

Dawn Holland, NIESR principal research fellow, told a press conference Friday: "We are looking at a weak and struggling global economy. We are forecasting 3.1 percent GDP growth in 2013, more or less the same as we saw in 2012."

Trend growth in the global economy is about 4 percent, said Holland, adding that "We are still well below what we could consider normal growth at the global level".

Global growth was forecast to rise to 3.4 percent in 2014.

Holland said, "The Euro area continues to be the area that lags most behind the rest of the world and is forecast to remain in recession this year."

In the US, economic growth in the first half of 2013 had been "unimpressive". This was not unexpected but was still behind trend growth, said Holland.


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