Watch out for 2011--that's when the global economy is projected to be weakest

10/08/2010 2:53 pm EST

Focus: STOCKS

Jim Jubak

Founder and Editor, JubakPicks.com



Not exactly unexpected but still surprising.

On October 6 the IMF (International Monetary Fund) released its forecast for global economic growth 2010 and 2011.

Once again developing economies will lead global growth. Nothing unexpected there.

But what is surprising is size of the gap between developing and developed economies in 2011.

The global economy will grow by 4.8% in 2010. That’s a slight improvement from the 4.6% growth projected in July. But global growth will slow to 4.2% in 2011. The July projection called for 4.3% growth in 2011.

Developing economies will growth by 7.1% in 2010 and 6.4% in 2011.

And developed economies?

Developed economies are projected to growth by just 2.7% this year and 2.2% in 2011. The deceleration will begin in the second half of 2010 and continue into the first half of 2011 before growth picks up again in the second half of 2011. (If the IMF is looking for just 2.2% growth for the entire year, the first half of 2011 could be very rocky indeed.)

The IMF was not very optimistic about the U.S. economy projecting 2.6% growth in 2010 and just 2.2% in 2011. The economies of the Euro Zone will grow by 1.7% in 2010 and 1.5% in 2011.

China’s growth will slow to 9.6% in 2011 from a projected 10.5% in 2010. India will grow by 9.7% this year, the IMF projects, and 8.4% in 2011.

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