Yikes: IMF lowers global economic growth forecasts

posted at 7:21 pm on April 16, 2013 by Erika Johnsen

Le sigh. The International Monetary Fund and World Bank are in the midst of their spring meetings, and found themselves obliged to ever-so-slightly revise their projections for global economic growth in their latest report:

In a periodic update to its economic projections, the fund said on Tuesday that it expected global growth of about 3.3 percent this year and 4 percent in 2014. That is a reduction of 0.2 percentage point since its January estimate for 2013; it did not change its estimate for next year’s growth. …

Recession continues to afflict Europe, and the world still struggles with high unemployment, but risks to the downside — in particular from the threat of a country’s leaving the euro zone and from fiscal policy uncertainty in the United States — have faded.

“Global prospects have improved again but the road to recovery in the advanced economies will remain bumpy,” said the report, called the World Economic Outlook. “Policy makers cannot afford to relax their efforts.”

The report again focuses in no small part on the economic troubles emanating from Europe. The fund cut its projections of current-year growth for the euro zone economies of France, Italy and Spain, as well as for Britain, which has also carried out austerity policies and entered a period of economic contraction.

Bumpy. Uhm, guys? What is this faded risk in regards to a country leaving the eurozone we’re talking about? Are we perhaps forgetting something in this mildly reduced yet oh-so-cautiously positive outlook for global economic growth? Like, oh, I don’t know — the fact that the European debt crisis is still wildly unresolved and will probably continue to be so as long as the euro keeps acting like a cancer on the competitiveness of the entire region? All of the monetary easing and bailout packages and whatever else in the world won’t undo the fact the the entire eurozone is in a very deep pickle that is going to cause a lot of material pain no matter which way it plays out, as Walter Russell Mead broke down on his blog today:

As Münchau points out, this situation means that Europe’s single currency has in effect already failed. €300,000 in Germany is not the same as €300,000 in Italy or Spain, and there is no way to equalize values without years of wretched and ruinous pain. …

So we’re in an interesting situation. The crisis is crippling the south, but the south has no power to resolve the crisis. The crisis isn’t comfortable for the north but still looks less painful than the solution. So the north, which has the ability to resolve the crisis, doesn’t have the will to do it and the south, which has the will, lacks the ability

And meanwhile everything in Europe gets worse. As we’ve said before, with the exception of communism itself, the euro has been the biggest economic catastrophe to befall the continent (and the world) since the 1930s.

I wonder when these guys are finally going to admit that the entire euro experiment was a serious mistake. By the looks of it, not any time even remotely soon.


Related Posts:

Breaking on Hot Air

Blowback

Note from Hot Air management: This section is for comments from Hot Air's community of registered readers. Please don't assume that Hot Air management agrees with or otherwise endorses any particular comment just because we let it stand. A reminder: Anyone who fails to comply with our terms of use may lose their posting privilege.

Trackbacks/Pings

Trackback URL

Comments

I wonder when these guys are finally going to admit that the entire euro experiment was a serious mistake.

Probably around the time Obama and the Dems sign the US up to join the Euro.

AUINSC on April 16, 2013 at 7:28 PM

God, these people are stupid. And now they’re caught between the necessity of telling the big “things are improving” lie and admitting it’s a total SNAFU in order to maintain enough credibility to continue with the big lie.

Socialist currency, monetary and economic policies DO NOT WORK!!!!

ROCnPhilly on April 16, 2013 at 7:30 PM

The answer, of course, is to increase taxes, make more regulations, and print a lot more money.

It has worked so well in the last four years.

jukin3 on April 16, 2013 at 7:39 PM

I wonder when these guys are finally going to admit that the entire euro experiment was a serious mistake. By the looks of it, not any time even remotely soon.

No one could be using the Euro, it could be in the history books; and they would still be talking about what a great idea the Euro is.

And it was always about an integrated government, the project. To acknowledge failure anywhere before Universal Harmony Day isn’t in their genetic code. Ask Obama about his economic policies and governance — he’s got the same code. He’ll tell you everything is going swimmingly, excepting Republican resistance and obstruction, and the unwashed that support the Republicans without knowing any better, what with all the mouth-breathing.

Axe on April 16, 2013 at 7:43 PM

These guys are lying and/or dreaming. Germany will end up owning the whole of Europe, but will be unable to collect, breaking them, as well. If they’d kept separate currencies, the PIIGS could have gone Zimbabwe one at a time with other countries deciding for themselves what risks and investments to make. The socialist Nirvannans would then be taking it in the teeth as they so rightly deserve. Instead, it’s just a bunch of Occupy Europe crybabies whining for more as the entire European economy bleeds out.

ROCnPhilly on April 16, 2013 at 7:47 PM

I wonder when these guys are finally going to admit that the entire euro experiment was a serious mistake.

Sure funny some dumb effer like me with only a junior college degree thought it was a terrible idea all along.

arnold ziffel on April 16, 2013 at 7:50 PM

Le An Forward, international style!

Bishop on April 16, 2013 at 7:50 PM

Unexpectedly?

ss396 on April 16, 2013 at 8:32 PM

From where I sit, Mead is an optimist.

3.3%! These guys may be bigger schills than Obama.

burt on April 16, 2013 at 10:37 PM

Erika:

The North does NOT have the ability and the South does NOT have the will.

Pay your debt down as fast as you can. There is no better ROI.

WryTrvllr on April 16, 2013 at 11:50 PM

Nice of the Idiots, Morons and Fruitcakes to tell us so soon.

/s

MelonCollie on April 17, 2013 at 12:26 AM