The “legacy of unresolved problems” in European banking systems are, according to the IMF, imminent risks for the world economy.
The institution headquartered in Washington points out, in particular, to the difficulties in the Portuguese and Italian banking: “The prolonged turmoil in the financial markets and the global rise in risk aversion may have severe macroeconomic consequences”
According to the International Monetary Fund, these consequences happen to the “intensification of problems in the banks,” and in particular “the vulnerable economies”, examples of which are Portugal and Italy.
“the shock provoado by Brexit arises from unresolved in the European banking system problems, particularly in Italian and Portuguese banks, “notes the document.
Effects of Brexit
In updating the World Economic Outlook , known this
Tuesday, the IMF has lowered growth projections for
global economy. It is expected for this year’s growth of 3.1 percent
in world GDP, a review that cuts of 0.1 percentage points
previous projection. The Gross Domestic Product (GDP) for 2017 will be
3.4 percent
according to forecasts of the institution led by Christine Lagarde.
In the developed economies, growth projections are also lower. Especially the United Kingdom, the country that suffers a review in more pronounced low, especially in 2017. If this year’s growth forecast by the IMF is 1.7 percent (ie minus 0.2 points from the previous forecast ), next year growth will be only 1.3 percent, representing a decrease of 0.9 percentage points.
A result that the IMF associated with the United Kingdom’s decision to leave the European Union, voted in a referendum last June 23.
In the report, the Fund refers hte results referendum “surprised the global financial markets” and involves so “the materialization of an important downside risk to the global economy.”
Still, the projections point to the “gradual reduction of uncertainty” in extent that agreements between the UK and the European Union will prevent the “increase in trade barriers” to ensure, in turn, pay off the financial and political impact of Brexit.
China, Brazil, and non-economic factors
In relation to one of the world’s major economies, the Chinese, the IMF also is worried. The warning Fund for credit as a key factor of growth, which “increases the risk of a possible adjustment disruptive.”
In Brazil, the scenario predicted by the IMF is less catastrophic: “Consumer confidence and business seems to have already hit the bottom in Brazil, and the recession of GDP in the first quarter was lighter than anticipated” you can read the report, which provides for an expansion of 0.5 percent, after the recession is expected to reach 3.3 percent in 2016.
the International Monetary Fund also lists several risk non-economic origin “. the political divisions in developed economies may hamper efforts to tackle structural challenges persist and the problem of refugees a shift to protectionist policies is a threat,” the document
As a factor. external potential influence on the economy are also “geopolitical tensions, armed conflicts and terrorism”, or climatic factors, including drought in Africa or health emergencies, such as Zika virus that currently affects Latin America.
A new normal?
In this report presentation press conference, Maury Obstfeld, chief economist at the IMF called on global policy to not settle before the current growth rates. It says that these values should not be accepted as “the new normal”, out of the reach and influence by political means.
“The risks go beyond the purely economic costs of persistent stagnation. The low growth environment will worsen social tensions associated with wage stagnation of long-term and structural economic changes,” added the economist.
the chief economist also draws attention to the “popular discourses”
who blame the markets and global economies “of all diseases
world. “
According to Maury Obstfeld, it is up to political leaders” offer hope “that replenishes the middle classes and vontantes that” the benefits of economic growth can be more fairly shared. “
(c / Lusa)
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