SINGAPORE-based International Rubber Study Group (IRSG) is to revise its growth forecast for natural and synthetic rubber this year, since the International Monetary Fund (IMF) has cut its global economic growth forecast this year to 3.3%, down from its January projection of 3.5%. It has also reduced its 2014 forecast to 4% from 4.1%, due to sharp government spending cuts in the US and the latest struggles of recession-stricken Europe.
The growth in global demand for natural and synthetic rubber will be slower than previously expected this year, against concerns about the health of the world economy, said Stephen Evans, Secretary-General of the IRSG, speaking at a rubber summit organised by the group in Singapore recently.
“The issue is there is plenty of inventory around as everybody reports, which more than covers an increase in growth. But we expect our annual projection of growth to be marked down slightly in response to the lower GDP forecast by IMF,” he said. In August last year, IRSG said global demand was likely to rise 4% year-on-year to 27.7 million tonnes in 2013 as consumers start rebuilding inventories. IRSG bases its estimates on IMF’s economic growth forecasts.