Olivier Blanchard, the Chief Economist at the IMF, explains the IMF economic forecast. Global growth, led by emerging market countries, will be 3.5% in 2012 and it will improve slightly to 4.1% in 2013. The major risk in the emerging markets is their dependence on exporting to the advanced economies that will experience low growth. Nevertheless, China will grow by 8.2%; India by 6.9%; Brazil by 3.0%, and Russia by 4.0%
Growth will be slow in the advanced economies. It will be 1.4% in 2012 and 2.0% in 2013. The US will grow by 2.1% in 2012 and grow slightly to 2.4% in 2013. As one might expect, the eurozone will have negative growth in 2012 and grow less that 1% in 2013. Risks in the eurozone are also the biggest question mark in the forecast. Fiscal consolidation is necessary, but so is economic growth. The hard problem is trying to figure out how to grow the economy in the short term, while dealing with longer term sovereign debt problems and global imbalances.
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