The International Monetary Fund has cut its global growth forecasts for the third time in less than a year, citing a sharp slowdown in China trade and weak commodity prices that are hammering Brazil and other emerging markets. Sonia Legg reports
Unilever knows all about slowdowns in China and emerging markets - it was hammered by them in 2014. But the past year has been more positive for the consumer goods group - underlying sales rose four percent and core operating profit was up 12 percent. But it's warning it may not last - high volatility the big worry. The International Monetary Fund has similar concerns - it's cut its global growth forecasts for the third time in less than a year. (SOUNDBITE) (English) IMF ECONOMIC COUNSELLOR, MAURICE OBSTFELD, SAYING: "China could encounter rough patches where growth slows more than expected directly affecting trade partners while disturbing foreign exchange and other asset markets world wide." The revision to 3.4 percent for this year and 3.6 percent next was no surprise. Markets have plunged in recent weeks because of the problems. EXT Capital's Joe Rundle (SOUNDBITE) (English) ETX CAPITAL'S HEAD OF TRADING, JOE RUNDLE SAYING: "We've seen China slowdown dramatically, we seen oil prices fall and it looks like we are going to be in an area of low oil prices for some time to come." The fall in commodity prices has reversed the fortunes of many producing countries - like Brazil and Russia. It's instead favouring those who consume the most. (SOUNDBITE) (English) ETX CAPITAL'S HEAD OF TRADING, JOE RUNDLE SAYING: "We are seeing the UK and U.S. beginning to enter a recovery phase with a period of more normal interest rates, but Europe is still struggling. Emerging markets with their currency woes look like they are going to struggle over the next few months. I think we are going to see a big change, a big shake-up for the world economy." So China may have set the tone for 2016. And that leaves many central bank's with a dilemma. Rate rises in most of Europe are certainly not expected any time soon.