In its latest World Economic Outlook, the International Monetary Fund (IMF) cut the global economic growth forecast for this year to 3.2 per cent from 3.4 per cent projected last January. The outlook for next year was also lowered to 3.5 per cent from 3.6 per cent.

According to the IMF, the global economy is set to continue expanding at a slower pace as financial and geopolitical uncertainties increase and the prolonged weak growth poses greater risks to the outlook.

The IMF recommends aggressive policy actions to lift demand and supply potential to boost growth, saying the current diminished outlook calls for an immediate, proactive response.

In the meantime, industrial production in the eurozone fell the most in 18 months during February, retracing some of the gains seen at the start of the year.

Data from Eurostat showed that output declined by 0.8 per cent, more than the 0.7 per cent than economists had forecast.

The decline followed a revised 1.9 per cent jump in January, which was the biggest since 2010. Output for January was revised down from 2.1 per cent.

While the February drop is partly technical, surveys and confidence indicators suggest there may be more weakness in the eurozone’s economy. The manufacturing Purchasing Mangers’ Indexes (PMI) compiled by Markit have declined in recent months, and economic confidence in the 19-nation currency bloc has fallen to their lowest in more than a year.

UK inflation rose to a 15-month high in March as an early Easter boosted air fares and clothing costs increased. Consumer prices rose by 0.5 per cent from a year earlier, the fastest increase since December 2014, according to the Office for National Statistics. In February, prices had risen by 0.3 per cent. Core inflation, which excludes volatile items such as food and energy prices, advanced by 1.5 per cent in March, the most since October 2014.

Another report from ONS last week showed that factory gate prices slid by 0.9 per cent in March from last year following February’s 1.1 per cent drop, while prices were forecast to fall by one per cent.

This report was compiled by Bank of Valletta plc for general information purposes only.