The global economy is expected to grow this year at a pace lowest since 2009, the year that was in recession, the result of the poor performance of the u.s. economy and the uncertainty created in Europe and in the United Kingdom with the vote in favor of the output of the European Union, says the International Monetary Fund. The IMF is concerned about the growing wave of populism and the growth of nationalist policies.
The numbers little change, the alerts also do not, but the intensity is increasing. In the Economic Forecasts in the World at the Bottom gives this Tuesday the meet, the forecasts for the world economy are the same that are disclosed in the interim forecast in July, but slightly worse (a tenth) to the given to know in April, at the review more extensive then made. the The world economy should grow 3.1 percent this year and accelerate to 3.4% next year.
As pointed out by the chief economist of the institution, Maurice Obstfeld, compared with a year ago, when he joined the Fund, the risks seem to be mitigated, the growth in China remains high, the recovery seems to be gaining traction in the rest of the countries, the prices of raw materials rebounded, the volatility in the markets has decreased.
The devil is in the details, and, as says Maurice Obstfeld, looking more closely, there are reasons for concern. A good part of them can be attributed to the internal politics of the countries and its effect on the remaining, especially when we talk about advanced economies, which the IMF now puts the grow less 0.2% of GDP, compared to that predicted in July.
According to the Fund, the Brexit makes uncertain the future of the commercial and financial links with the rest of the 27 countries of the European Union, creating political uncertainties and economic, which threaten to undermine the investment and hiring across Europe. The IMF goes further, and, in addition to the cut in the 0.1% and 1.1% growth in the Uk in 2016 and 2017, respectively, says that only in the several years it will be possible to understand how will be the trade relations between the United Kingdom and the European Union.
But it is not only the context of strictly economic concerns from the IMF on the issue of Brexit (and not only). The Fund goes beyond the impact of the vote for the other countries of the European Union and says that there is a growing pressure on the global level for countries to adopt postures populist policies and nationalist.
The vote for the Brexit and the presidential campaign underway in the United States have shown a weakening in the consensus around the benefits of economic integration across the border. The concerns around the impact of foreign competition on employment and wages in a context of sluggish growth are increasing the appeal of approaches protectionist, with potential ramifications for the flows of trades and global integration more generally," writes the Fund.
THE IMF is concerned about the increasing opposition to international trade, which has translated recently in opposition to the trade agreements, both on the side of Europe in relation to the United States, as in the election campaign in relation to this and other trade agreements (which includes treaties signed with the asian countries).
The solution, says the IMF, is a renewed commitment of the politicians to explain the benefits of economic integration in the long term and to guarantee the execution of social programs as well directed to help those who are suffering the consequences of economic integration.
Another request that is not new is the coordination between the countries to better benefit from the effect of the decisions at the national level, but also the use of the budget margin. The Fund has advocated that the countries with the best conditions of public finances should make use of that margin for investment, particularly in infrastructure, and even those countries with the lowest margin they can make investments, by making different choices about the money they have available to spend.
in This sense, the IMF argues that monetary conditions should continue flexible, with the central banks continue to support the economies, and that, once more, all this can not leave aside the necessary care with the public accounts, with a special focus on the reduction of excessive indebtedness, and the implementation of structural reforms.
View of the sky, the wall looks intact. The economy continues to grow at robust growth rates, higher a large part of the emerging economies, the reorientation of the economic model continues, and the biggest fears do not seem to have confirmed, at least for now.
But up close, the conversation is a little different. According to the IMF, changes in the chinese economy may happen to be a bit more bumpy than expected this time, especially due to the stimulus measures that the chinese Government is implementing that are not only grow significantly on the public debt the chinese, but also make the necessary reforms continue to be postponed, due to the results of the somewhat misleading produced by the stimuli of the short-term.
If the path is more chaotic, suffers from China and suffer from many of the emerging economies that rely on export of raw materials to the powerhouse economy of Asia. Among these countries are many of the countries of southeast asia, but also South Africa and Brazil.
Despite the political turmoil that followed the economic slowdown widespread in the brazilian economy and that many of the troubles it has caused to brazilian politicians with the increasing demand of the brazilian population, the IMF is even more optimistic about the economy of Brazil.
it Is true that the IMF expects recession in Brazil, after the GDP dropped 3.8% in the past year, but also expects this recession to be the lowest and that the country has to grow in 2017. In the accounts of the IMF, the brazilian economy should fall by 3.3% this year, when before I hoped would fall to others to 3.8%, and that in the next year to grow by 0.5%, when before it pointed to a stagnation. The numbers the more negative were of April, being that this forecast confirms only the numbers of July.
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