IMF sees stronger growth and higher risk
Resource Hotspot 296
The IMF has released its latest World Economic Outlook, projecting growth of 4.6% in 2010 and 4.3% in 2011. The 2010 figure has been revised up by 0.4% since its last update, reflecting stronger than anticipated activity during the first half of the year. At the same time, it points out that the downside risks to its forecasts have risen sharply amid renewed financial turbulence.
In its update it points to restoring progress toward financial stability to contain the risks and keep the economic recovery on track. Rapid implementation of stabilization measures taken by the euro area government authorities will be a key component in calming financial markets. More generally, it believes government policies in advanced economies should focus on credible fiscal consolidation—notably measures to enhance medium-run growth prospects, such as reforms to entitlement and tax systems.
The GDP trends are captured in the following chart:
Source: IMF
As always, the overall projections of world growth rates hide a large difference between and within advanced and emerging and developing economies, with the United States expected to grow at about 3 ¼ percent in 2010, the euro area at 1 percent, Japan at close to 2 ½ percent, and emerging and developing economies averaging about 6 ¾ percent – as illustrated in the table below:
Source: IMF
Also, there is a significant difference between the first and the second half of 2010 – with growth rates in a number of advanced countries expected to grow at slower rates.
Included in the IMF’s presentation material is a useful series of charts that summarise key global economic indicators:
Source: IMF
