The world economy is in the middle of a balancing act. On the one hand, countries must address the legacies of the global financial crisis, ranging from debt overhangs to high unemployment. On the other, they face a cloudy future. Potential growth rates are being revised downward, and these worsened prospects are in turn affecting confidence, demand, and growth today.
The interplay of these two forces—the crisis legacies proving tougher to resolve than expected and potential growth turning lower—has resulted in several downward revisions to the forecast during the past three years. The forecast in this edition of the World Economic Outlook is, unfortunately, no exception. World growth is mediocre and a bit worse than forecast in July. At the same time, because these two forces operate to different degrees in various countries, the evolution of the global economy has become more differentiated.
http://www.imf.org/external/pubs/ft/weo/2014/02/pdf/text.pdf
