Friday, November 28, 2008

IMF: Only One Year of Below-Average Growth in a Decade-Long Strong Global Economic Expansion?

According to the International Monetary Fund's most recent economic outlook, world real GDP growth is projected to slow from 5% in 2007 to 3.75% percent in 2008 and then to 2.2% in 2009 (see chart above), with the downturn led by advanced economies.

Looking forward, the IMF predicts that world real GDP will rebound to above-average growth rates of 4.2% (2010), 4.8% (2011), 4.8% (2012) and 4.7% (2013). Growth for the advanced economies is forecast to be above 2% by 2010, with even higher growth of between 2.5% to 3% between 2011 and 2013.

Bottom Line: If the IMF forecast is accurate, the current global economic slowdown will produce only one year of below-average world output growth (2.2% in 2009), which will follow six years of strong world economic growth above the 3.46% post-1980 average (see chart), and an above-average expansion of the world economy will resume in 2010 with at least four years of real GDP growth close to 5%. Moreover, if the IMF is correct, the predicted global economic slowdown of 2009 will be roughly equivalent to the world slowdown in 2001, and much less severe than the slowdowns in 1990-1991 and 1980-1982.


At 11/28/2008 10:14 PM, Anonymous Anonymous said...

This is only the first year Prof. The global depression has only just begun. You've been claiming halcyon times all year. You're going to see years of terrible growth. The international bubble has finally exploded.

At 11/29/2008 7:16 AM, Anonymous Anonymous said...

Read the report.

In advanced economies, output is forecast to contract on a full-year basis in 2009, the first such fall in the post-war period.

In other words, back to the 1930s.

Let's review your report card. Subprime is contained, right. At the latest count, the U.S. government has now guaranteed $8.5 trillion of financial sector debt. U.S. credit default swaps now cost more than Finland, Norway and Germany. Subprime is contained, right.

It's time laissez-faire libertarian Carpe Diem performed the mea culpa dance on an abandoned GM factory plant floor in Flint and posted it on youtube.


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