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Thursday, February 12, 2009 

IMF revised its estimatives again for the world economy

The IMF has recently submitted a second revision of the scenario set in October for the main world economies. The publication of two interim updates in a short period of time, one in November and another in January, reflects clearly the consequent inability of key institutions to anticipate the impact of the crisis in the medium term in a context of instability in financial markets and strong contraction of the real economy. Currently the IMF's forecasts suggest that 2009 is the year of lower world GDP growth in the post of the second World War. The growth of only 0.5% for the global economy resulting in the scenario of the IMF, not only of a very significant contraction in the developed economies (-2%) as a sudden braking of the emerging countries (growth of 3.3% versus 6.3% in 2008 ) that have shown unexpected signs of weakness as a result, particularly the sharp decline of international trade, clear the depth of the crisis in which we live.

With regard to Japan, U.S. and Eurozone IMF forecasts for 2009 are for the latter the most penalized 2% contraction, while the U.S. and Japan should take respectively 1.6% and 1.7%. These estimates are from meetingins that were released by the European Commission . Denotes only that the Commission is more pessimistic on the Japanese economy, which provides for a contraction of 2.4% this year. Indeed, the data have been published regarding the last quarter of 2008 indicate not only a densification of the financial crisis as a significant contraction in world trade. In this respect strongly recessive, the IMF warns that risks of deflation in some economies are increasing pointing to growth of prices in all the developed economies very anemic, but positive (0.3%) in 2009.

The signs that emerging economies are also being heavily hit by the crisis have been multiplied since the beginning of the year and the economic agents become more pessimistic, which in a high aversion to risk, investors should remove market emerging. Indeed, the Institute of International Finance (IIF) recently published a report that provides that net capital flows to emerging economies fall this year compared to about half the peak reached in 2007, with adverse impacts, especially in economies that have high external deficits. Even those economies that were better prepared to face the crisis, such as China or Brazil, have shown signs of rapid deceleration. A few days ago, I received this confirmatiom after a short conversation with Brazilian friends. The situation is not as bad as in Europe or America, but is already visible in urban centers that consumers give signs of shrinking in its spending.

Despite the black background track for 2009, the major organizations worldwide continue to point the second quarter of 2009 to the beginning of recovery, although modest, the indicators of activity as a corollary of the very significant assistance from the authorities in monetary and fiscal. It is precisely the uniqueness of public action in progress, which increases the uncertainty about the behavior of the economy over the medium term make economic forecasts, especially beyond 2009, an exercise doomed to rapid outdated. The economic picture is changing rapidly in this adverse environment, so that forecasts are minor at this particular time, but with a high probability of being correct. Let's hope for better days.

AC

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  • I'm a 43 year old Independent Trader using proprietary technical analysis with more than 18 years experience of investing in the US stock markets. I started this blog in 2006 simply as a way to share my thoughts about capital, risk management, and trading. My blog contains only my personal opinion and is provided for informational purposes only.

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