The International Monetary Fund followed the World Bank once more Tuesday morning by releasing their 2013 & 2014 revisions for growth forecasts and not surprisingly to the downside. It is important to take note that these lowered forecasts are all in the context of previous revisions to the downside last July.
The release included comments from Chief Economist Mr. Blanchard that sought to make clear that a default by the U.S. would have severe consequences for the global economy. As has been noted by the IMF before, he went on to discuss implications of the Fed’s QE taper in regards to tighter global markets. Low levels of inflation in the U.S., Japan and Euro-Area were cited as concerns with downside risks continuing to remain present.
In regards to commodities, the IMF said it is taking into account lower metal and food prices in their outlook for emerging-markets. A possible scenario where oil prices were pushed to $150 was mentioned as a worst-case scenario that would lead to slower growth.
While many institutions and leaders have been unable to take off the rose-tinted glasses, Mr. Blanchard was surprisingly straightforward in his comments on emerging markets and low-income countries. In a progressive step, the chief economist said that it is time to make plans for the easing of QE from the Fed- a wise proposition indeed.
October Estimates
|
July Estimates
| |
Global Growth (2014)
|
3.6%
|
3.8%
|
Global Growth (2013)
|
2.9%
|
3.1%
|
Advanced Economies (2014)
|
2.0%
|
-
|
Advanced Economies (2013)
|
1.2%
|
-
|
United States (2014)
|
2.6%
|
2.7%
|
United States (2013)
|
1.6%
|
1.7%
|
China (2014)
|
7.3%
|
7.7%
|
China (2013)
|
7.6%
|
7.8%
|
Japan (2014)
|
Unchanged
|
1.2%
|
Japan (2013)
|
Unchanged
|
2%
|
Emerging Markets (2013)
|
4.5%
|
5.0%
|
Spain (2014)
|
0.2%
|
0.0%
|
Spain (2013)
|
-1.3%
|
-1.6%
|
Mexico (2013)
|
1.2%
|
2.9%
|
India (FY15)
|
5.1%
|
6.3%
|
India (FY14)
|
3.8%
|
5.6%
|
Brazil (2014)
|
2.5%
|
3.2%
|
Source: http://dld.bz/cSc5R
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