IMF issues gloomy forecast

Updated at 12:20 pm on 24 January 2013

The International Monetary Fund is warning again of a weakening global economic recovery, despite government efforts to stimulate growth.

In its latest report, the agency says the global economy is likely to grow at a slower rate than previously forecast, over the next two years.

It has ditched its growth forecasts for the Eurozone this year, which it now expects to remain in recession.

However, IMF chief economic counsellor, Olivier Blanchard said there are some bright spots in the global economy - especially Brazil, Russia, India and China.

Meanwhile, a report by the Bank of Spain said on Wednesday the Spanish economy fell steeply in the final quarter of 2012.

Unemployment, which is estimated to be about 26%, and austerity measures slashed demand.

Next story in Business: Japan posts record high trade deficit in 2012