IMF Downgrades Growth Projections, Warns Of “Synchronized Slowdown”
By Barry Grey
Global Research
April 13, 2016
The International Monetary Fund’s “World Economic Outlook” (WEO), released Tuesday in advance of this week’s semiannual meetings in Washington of the IMF and World Bank, gives a gloomy and fraught estimate of the state of the world economy, nearly eight years after the 2008 financial meltdown.
The IMF has again downwardly revised its projection for global growth, the fourth straight cut in a year. The WEO estimates that the world economy will grow by only 3.2 percent in 2016, a reduction of 0.2 percentage points from the projection the IMF made only three months ago. The new projection is 0.6 percentage points below the organization’s July 2015 estimate.
It is only a hair above last year’s 3.1 percent global growth rate and only marginally higher than the 3.0 rate the IMF once considered indicative of a global recession. The organization also downgraded its world growth estimate for 2017 from 3.6 percent to 3.5 percent.
Even this pessimistic prediction is ringed with warnings and caveats that strongly suggest the so-called “recovery” from the 2008 crash is teetering on the edge of a new financial crisis and slump. The WEO executive summary states that “uncertainty has increased, and risks of weaker growth scenarios are becoming more tangible.” It adds, “The fragile conjuncture increases the urgency of a broad-based policy response to raise growth and manage vulnerabilities.”
The summary goes on to speak of “still weak external demand,” a “threat of synchronized slowdown,” an “increase in the already significant downside risks,” and a “critical stage of the global recovery.”
The press release on the IMF web site is headlined “Global Economy Faltering from Too Slow Growth for Too Long.” The statement highlights as major trends: “Financial risks prominent, together with geopolitical shocks, political discord.”
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