Comedy Of Forecast Errors: Here Are The IMF's Latest Projections Of Economic Growth
Another quarter, and another attempt at predicting the future by the people whose predictions have become the biggest butt of all economics jokes, even more so than Paul Krugman columns.
We are talking, of course, about the IMF's World Economic Outlook update.
It is here we learn that, at the same time as IMF chief economist Olivier Blanchard was saying that the global economy is stronger and broader, the IMF... cut its 2014 global GDP outlook from 3.7% to 3.6%. Perfectly sensible of course, because it is the same mostly US-funded policy perpetuating economists that added that "sooner is better than later on ECB moves" - moves which naturally entail moar QE, the same QE which IMF staffers last night said has "costs that now otherwise its benefits." One can't even keep the lies straight any more, let along the truth.
In any case, aside from cut to global GDP, the IMF kept the and China US unchanged, boosted the Eurozone (we wonder how many more changes to the definition of what makes up European GDP will be required for that prediction to come true), and finally slashed Japan by 0.3% to just 1.4% in 2014 and 1.0% in 2015. Hardly the glowing testament that is the gift to people everywhere which is Abenomics, that Abe would like to hear.
Here are the charts showing not only the most recent forecast but the history of revisions in the past two years:
But the best chart, and the one that actually does matter, if not for the absolute level, but for the trendline, is that of world trade. Because while QE may manipulate relative asset prices and "wealth effects", in the absence of growth to global trade, and certainly contraction, there is only one possible outcome: global economic deterioration. Sadly, the trendline in historic and future global trade is very clear.
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