Weaker emerging economies are exposed to sudden capital flight with the global economy on course to strengthen as expected this year, the International Monetary Fund said yesterday.
Although the fund said growth in most advanced and emerging economies was accelerating as expected, it said the world was “not out of the woods yet” with deflation fears rising in Europe and the US and vulnerability in some emerging economies.
The warnings came as the IMF upgraded its 2014 global growth expectation by 0.1 percentage point. It now forecasts 3.7 per cent expansion of the global economy in 2014, a figure that shows it is recovering from the 3.0 per cent rate last year.
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