IMF Slashes World GDP Expectations; Japan Only Beacon Of Global Growth Hope

Tyler Durden's picture

While expectations for global GDP growth are now expected to be +3.3% for 2013 against +3.2% for 2012, the IMF has just slashed the previously rosy 3.6% expectation as the global economy stalls. The US and Europe had significant cuts to their 2013 GDP growth expectations (though of course, this dip recovers hockey-stick-like in 2014). It will perhaps be surprising to learn that Japan had its growth expectation raised the most of all the major advanced and emerging nations. World Trade volume growth has also been cut notably - driven by a fall in the previously supposed driver of growth - emerging markets. The IMF's less sanguine forecasts, however, are caveated with hope-driven perspective such as expectations that Debt-to-GDP will drop for all nations from 2013 to 2018 and while energy remains a major downside risk to global growth, we were stunned to read that they cite S&P 500 option prices as an indicator of upside potential. It seems, even at the IMF, that the market is all that matters (oh and the Japanese printing press).

 

The global growth projection - quite a cone of uncertainty...with downside risk dominant

 

As the balance of risks is between oil market concerns and the ebullience of S&P 500 options prices!!! Is it any wonder that VIX is suppressed?

 

But have no fear as it is Japan that is to save us all...

 

Though Europe remains the drag...

 

But as is clear above - any slowdown will rapidly revert to more growthiness in 2014 - even though commoditty prices and economic activity shows no sign of that 'hope'...

 

Charts: IMF