WEO | IMF Blog

Global Economy Gaining Momentum—For Now

Versions in عربي (Arabic), 中文 (Chinese), Français (French), 日本語 (Japanese), Русский (Russian), and Español (Spanish)

Momentum in the global economy has been building since the middle of last year, allowing us to reaffirm our earlier forecasts of higher global growth this year and next. We project the world economy to grow at a pace of 3.5 percent in 2017, up from 3.1 percent last year, and 3.6 percent in 2018. Acceleration will be broad based across advanced, emerging, and low-income economies, building on gains we have seen in both manufacturing and trade.

Our new projection for 2017 in the April World Economic Outlook is marginally higher than what we expected in our last update. This improvement comes primarily from good economic news for Europe and Asia, as well as our continuing expectation for higher growth this year in the United States.

Continue reading “Global Economy Gaining Momentum—For Now” »

By IMFBlog| April 18th, 2017|Advanced Economies, capital markets, Economic outlook, Economic research, Emerging Markets, Employment, Fiscal policy, Globalization, growth, inclusive growth, income, Inequality, labor markets, Low-income countries, Politics, productivity, Uncategorized|0 Comments

The Quest for Robust and Synchronized Growth

By Maurice Obstfeld

(Versions in Español, عربي, 中文, Français, Русский and 日本語)

Today, we released the October 2015 World Economic Outlook.

Our forecasts come at a moment when the world economy is at the intersection of at least three powerful forces.

First, China’s economic transformation – away from export- and investment-led growth and manufacturing, in favor of a greater focus on consumption and services. This process, however necessary and healthy in the longer term, has near-term implications for China’s growth and its relations with its trade partners.

Continue reading “The Quest for Robust and Synchronized Growth” »

By IMFBlog| October 6th, 2015|Advanced Economies, Annual Meetings, Asia, Economic Crisis, Economic outlook, Economic research, Emerging Markets, Europe, growth, IMF, International Monetary Fund, Investment, Reform|0 Comments

Behind the News in Greece and China, Moderate Growth Continues

By Olivier Blanchard

(Versions in Español and عربي)

Today we published the World Economic Outlook Update.

But first, let me talk about the elephant in the room, namely Greece.

The word elephant may not be right: As dramatic as the events in Greece are, Greece accounts for less than two percent of the Eurozone GDP, and less than one half of one percent of world GDP.
Continue reading “Behind the News in Greece and China, Moderate Growth Continues” »

By IMFBlog| July 9th, 2015|Advanced Economies, Asia, Economic Crisis, Economic outlook, Emerging Markets, Europe, Financial Crisis, Globalization, growth, IMF, Inequality, International Monetary Fund, Latin America, Politics, Reform|0 Comments

Four Forces Facing the Global Economy

By Olivier Blanchard

(Versions in عربي and Español)

In our April 2015 World Economic Outlook, we forecast global growth to be roughly the same this year than last year, 3.5% versus 3.4%. This global number reflects an increase in growth in advanced economies, 2.4% versus 1.8%, offset by a decrease in growth in emerging market and developing economies, 4.3% versus 4.6% last year. In short, to repeat the words used by the IMF Managing Director last week, we see growth as “moderate and uneven”.

Behind these numbers lies an unusually complex set of forces shaping the world economy. Some, such as the decline in the price of oil and the evolution of exchange rates, are highly visible. Some, from crisis legacies to lower potential growth, play more of a role behind the scene but are important nevertheless. Let me briefly review them.

Continue reading “Four Forces Facing the Global Economy” »

By IMFBlog| April 14th, 2015|Advanced Economies, Annual Meetings, Asia, Economic Crisis, Economic outlook, Economic research, Emerging Markets, Globalization, Government, growth, IMF, International Monetary Fund, Investment, Reform, Uncategorized|0 Comments

No Puzzle About Weak Business Investment: It’s the Economy!

By Aqib Aslam, Daniel Leigh, and Seok Gil Park

(Versions in عربي, 中文, Français, 日本語, Русский, and Español)

The debate continues on why businesses aren’t investing more in machinery, equipment and plants. In advanced economies, business investment—the largest component of private investment—has contracted much more since the global financial crisis than after previous recession. And there are worrying signs that this has eroded long-term economic growth.

Getting the diagnosis right is critical for devising policies to encourage firms to invest more. If low investment is merely a symptom of a weak economic environment, with firms responding to weak sales, then calls for expanding overall economic activity could be justified. If, on the other hand, special impediments are mainly to blame, such as policy uncertainty or financial sector weaknesses, as some suggest, then these must be removed before investment can rise.

Continue reading “No Puzzle About Weak Business Investment: It’s the Economy!” »

By IMFBlog| April 7th, 2015|Advanced Economies, Annual Meetings, Economic Crisis, Economic outlook, Economic research, Financial Crisis, Globalization, growth, IMF, International Monetary Fund, Investment, Reform, Uncategorized|0 Comments

Legacies, Clouds and Uncertainties

By Olivier Blanchard

(Versions in Français, español, 中文, Русский, 日本語)

The recovery continues, but it is weak and uneven.

You have now seen the basic numbers from our latest projections in the October 2014 World Economic Outlook released today. We forecast world growth to be 3.3% in 2014, down 0.1% from our July forecast, and 3.8% in 2015, down 0.2% from our July forecast.

This number hides however very different evolutions. Some countries have recovered or nearly recovered. But others are still struggling.

Looking around the world, economies are subject to two main forces. One from the past: Countries have to deal with the legacies of the financial crisis, ranging from debt overhangs to high unemployment. One from the future, or more accurately, the anticipated future: Potential growth rates are being revised down, and these worse prospects are in turn affecting confidence, demand, and growth today.

Because these two forces play in different countries to different degrees, economic evolutions are becoming more differentiated. With this in mind, let me take you on the usual quick tour of the world:

Continue reading “Legacies, Clouds and Uncertainties” »

By IMFBlog| October 7th, 2014|Advanced Economies, Annual Meetings, Asia, Economic outlook, Economic research, Emerging Markets, Europe, Financial Crisis, growth, IMF, International Monetary Fund, Latin America, Reform, Uncategorized|0 Comments

As Demand Improves, Time to Focus More on Supply

By Olivier Blanchard

(Version in Français, Español, Русский, عربي, 中文 and 日本語)

The dynamics that were emerging at the time of the October 2013 World Economic Outlook are becoming more visible. Put simply, the recovery is strengthening.

In our recent World Economic Outlook, we forecast world growth to be 3.6 percent this year and 3.9 percent next year, up from 3.0 percent last year.

In advanced economies, we forecast growth to reach 2.2 percent in 2014, up from 1.3 percent in 2013.

The recovery which was starting to take hold in October is becoming not only stronger, but also broader. The various brakes that hampered growth are being slowly loosened. Fiscal consolidation is slowing, and investors are less worried about debt sustainability. Banks are gradually becoming stronger. Although we are far short of a full recovery, the normalization of monetary policy—both conventional and unconventional—is now on the agenda.

Brakes are loosened at different paces however, and the recovery remains uneven.

Continue reading “As Demand Improves, Time to Focus More on Supply” »

By IMFBlog| April 8th, 2014|Advanced Economies, Africa, Asia, Economic Crisis, Economic outlook, Economic research, Emerging Markets, Financial Crisis, growth, IMF, Inequality, International Monetary Fund, Uncategorized|1 Comment

Are Emerging Markets Still On the Receiving End?

By Aseel Almansour, Aqib Aslam, John Bluedorn and Rupa Duttagupta

(Version in Español, Français, Русский, 中文 and 日本語)

The recent slowdown in emerging market growth is fueling a growing mania across markets and policy circles. Some worry that a large part of their stellar pace of growth over the 2000s (Figure 1) was due to a favorable external environment—cheap credit and high commodity prices. And, therefore, as advanced economies gather momentum now and begin to normalize their interest rates, and commodity price gains begin to reverse, emerging market growth could slip further.

Others instead contend that internal or domestic factors have played a role, with improved standards of governance and genuine structural reforms and robust policies, driving a fundamental transformation in the sources of emerging market growth towards a lower yet more sustainable trajectory.

Continue reading “Are Emerging Markets Still On the Receiving End?” »

By IMFBlog| April 3rd, 2014|Advanced Economies, Asia, Economic outlook, Economic research, Emerging Markets, Financial Crisis, growth, International Monetary Fund, Latin America, Uncategorized|0 Comments

Are Emerging Markets Adjusting to a New Normal?

By Aseel Almansour, Aqib Aslam, John Bluedorn and Rupa Duttagupta

Emerging markets have grown at a remarkable pace through most of the 2000s. They even rebounded strongly from the Great Recession, notwithstanding the sluggishness in advanced economies. Easy global financial conditions, rising commodity prices and beneficial terms of trade potentially compensated for weak external demand from the advanced economies.

But now, emerging market growth, while still strong, has begun to slow. This oddly coincides with an outlook for advanced economies that is improving, even if gradually. So what’s behind this dichotomy?

Emerging markets are adjusting to changes in the external environment. On the one hand, the incipient recovery in advanced economies is helping emerging markets, including through higher exports. On the other hand, the favourable external financing conditions are now beginning to reverse, implying a tougher financial environment for emerging markets. Then you have domestic factors, which appear to have pulled down growth in some emerging markets (see also IMF blog post on January 22, 2014, and December 18, 2013).

Continue reading “Are Emerging Markets Adjusting to a New Normal?” »

By IMFBlog| April 1st, 2014|Advanced Economies, Asia, Economic outlook, Economic research, Emerging Markets, Financial Crisis, growth, International Monetary Fund, Uncategorized|0 Comments

Where Are Real Interest Rates Headed?

By Andrea Pescatori and Davide Furceri

In the past few years, many borrowers with good credit ratings have enjoyed a cost of debt close to zero or even negative when it is adjusted for inflation. In other words, real interest rates, and, thus, the real cost of borrowing, have been about zero. The rate decline has been global—average global 10 year real rate declined from 6 percent in 1983 to almost zero in 2012 (see figure).

Because the recent interest rate declines reflect, to a large extent, weak economic conditions in advanced economies after the global financial crisis, some reversals are likely as these economy return to a more normal state.

Continue reading “Where Are Real Interest Rates Headed?” »

By IMFBlog| April 1st, 2014|Advanced Economies, Economic outlook, Economic research, Emerging Markets, Financial Crisis, growth, International Monetary Fund, Uncategorized|0 Comments

Load More Posts

Categories