The IMF is evidence of optimism

Ottawa and Washington – the global and Canadian economies still grieve to maintain their momentum in 2013, but in revised forecast relatively optimistic made public Wednesday, the international monetary Fund (IMF) supports glimpse of light at the end of the tunnel.
The IMF now expects the growth of the Canadian economy to reach a modest 1.8% in 2013 – two tenths of a point less than what was planned three months ago – and 2.3% instead of the 2.4% previously planned for 2014.
With regard to the world economy, the organization provides a growth of 3.5%, which is slightly lower than the tips of the month of October but still higher than the rate of 3.2 per cent last year.
In 2014, the IMF projected the global economy 4.1%. Would be the highest rate in three years.
However keep in mind that the world economy has just been through a zone of turbulence, recalled the international financial organization.
The actions that Governments and central banks around the world could bear fruit and have a positive impact on economic data, according to the IMF.
Global growth will be especially hampered by the new “weaknesses” of a euro zone that is headed for a second consecutive year of recession, the IMF believes.
“The eurozone continues to represent a significant risk to the Outlook for the world economy,” said the Washington institution in its economic Outlook.
Despite some “progress”, the eurozone is still the biggest concern. “Activity in the periphery of the euro zone has been even more depressed than expected, with signs of more pronounced impact” on the ring hard the region, said the Fund.
The institution therefore revised its calculations: while it previously provided a timid return to growth this year (+ 0.2%), it predicts now a second year of recession
(-0.2%) for the euro area where three countries (Greece, Ireland, Portugal) are under financial assistance, in the meantime maybe Cyprus.
According to the IMF, “uncertainty” remains on the outcome of the crisis in Europe and a “prolonged stagnation” is not excluded if the momentum for reform (banking supervision, political…) is running short.
In this context, the France still sees its forecast lowered this year from 0.4% to 0.3%, while the Government continues to hope for much better (+ 0.8%). The Germany sees its sabree forecast by 0.3 point, to + 0.6%.
Of a simple sentence, the report tries to close the debate – which runs through the IMF itself – about the dangers of austerity in Europe: “the periphery countries must continue their adjustment” budget, slice the Fund.
Supporter of a less rigid line, the Chief Economist of the IMF, Olivier Blanchard, recalled that the Organization had relaxed some austerity (Portugal, Greece…) but it has hammered savings measures remained necessary. “The growth is slow, more financing [of the country] needs are important and there is no infinite funding source”, he said.
Turning his eyes toward the United States, the IMF calls the world’s leading economic power to avoid a reduction in “excessive” deficits “in the short term” to not stifle a fragile growth that should CAP to 2%.
In early January, the cure of austerity ‘budget wall’ was avoided in extremis to the United States, but massive cuts in public spending are not excluded.
Global growth should again be driven by major emerging countries. China’s GDP is expected to grow 8.2 percent this year, followed by India (5.9%) or Brazil (3.5%), according to the Fund. Sub-Saharan Africa should, increase by 5.8%.
The IMF is also worried about a disconnect between the “optimism” of the financial markets and the real economy gloom.
***
With the Agency France-Presse