The global economy: Slower and slower

Posted: October 9, 2012 in economy
Tags: , ,


The International Monetary Fund’s new World Economic Outlook is out this week, and the latest global growth projections are dismal, if expected. A few things stand out. One is the steady downshift in global growth since 2010 (which, to be fair, was one of the best annual global growth performances ever). The IMF forecasts an acceleration in growth in 2013, but I’m not sure how many of us would bet on that. Another is the extremely ugly outlook for Spain and Italy—the IMF now forecasts another year of serious recession for Spain in 2013—which suggests that political and economic tensions within the euro zone will remain high. A third is the big downward revision to growth in emerging market economies and India especially.Not pictured in this chart is the forecast for a steady deceleration in world trade, including a large downward revision to forecasts for emerging-market imports and exports. The overarching view is a world in which troubles are propagated around the world, exacerbating local economic challenges. Europe’s sinking economy is socking emerging markets, frustrating efforts at rebalancing and reform.As my colleague notes, the IMF places fiscal mismanagement at the centre of the report. The rather large moves in budget balances already underway in much of Europe will continue, and many other advanced economies are now in the process of …

via Economic Crisis


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