http://www.economist.com/blogs/freeexchange/2015/04/world-economic-outlook
The IMF recently released its World Economic Outlook, a health-check on the world economy. In January, the IMF expected the American economy to grow by 3.6%; the IMF is now expecting the American economy to grow 3.1%. Because of the strong dollar, exports are falling which is taking away from corporate profits. Investment is not doing well either as energy producers are holding back in the hope of higher prices.
In the euro zone, things are looking better. Growth forecasts for Spain have increased from .3% to .5%. Reasons for this increase in growth include the weak euro, low oil prices, and quantitative easing which has boosted equity and bond markets. However, neither France nor Italy are expected to have growth levels above 1% this year and longer-term prospects are looking even worse.
Since February, the Russian ruble has appreciated by nearly a third. The IMF believes that Russia will see a deep recession of about 4% this year. However, no other big economies are expected to do as badly.
Do you think the IMF's predictions sound accurate? Are there any other areas that are a cause for concern?
2 comments:
About the EU prediction - I'm still not convinced on the health of the European Monetary Union. Greece's instability still threatens to take the whole EMU down with it, and fundamental political instability in the EU itself could prove problematic for monetary and fiscal policy cohesion and success in the EU.
I feel that this year will continue to be volatile due to the forex markets. Hopefully, the US growth will have strong investment to create a favorable climate in the future. I agree with Matthew's comments on the EU. I am leery of any conclusions and forecasts pertaining to the state of the EU at this time.
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