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IMF Cuts Global Growth For The Fourth Time In 12 Months... But That's Not The Biggest Problem
Moments ago the IMF did what it does best: it just cut its forecast for global growth yet again. Specifically, it said that "global growth for 2015 is projected at 3.1 percent, 0.3 percentage point lower than in 2014, and 0.2 percentage point below the forecasts in the July 2015 World Economic Outlook (WEO) Update. Prospects across the main countries and regions remain uneven. Relative to last year, the recovery in advanced economies is expected to pick up slightly, while activity in emerging market and developing economies is projected to slow for the fifth year in a row, primarily reflecting weaker prospects for some large emerging market economies and oil-exporting countries."
What is surprising about this particular estimate is that the IMF did not cut any of its core geographic regions: both Europe and China saw their 2015P GDP forecast remain unchanged (at 1.5% and 6.8%), while the US was raised modestly from 2.5% to 2.6% (it will soon revise this lower again). As a result, the driver for the cut in global growth was to a lesser extent Japan, which was revised from 0.8% to 0.6%, but it was the EM and oil exporters that saw the biggest cuts, with Russia (-0.4%), Brazil (-1.5%) and Canada (-0.5%) cut the most.
The culprit, indirectly, was once again China. To wit:
For most emerging market economies, external conditions are becoming more difficult. While currency depreciation will help net exports, the “pull” from advanced economies will be somewhat more modest than previously forecast, given their weak recovery and moderate prospects for medium-term growth. Capital flows to emerging markets have slowed in recent quarters, and the liftoff of U.S. policy rates from the zero lower bound is likely to be associated with some tightening of external financial conditions. And while the growth slowdown in China is so far in line with forecasts, its cross-border repercussions appear greater than previously envisaged. This is reflected in weakening commodity prices (especially those for metals) and reduced exports to China (particularly in some east Asian economies).
But the real punchline is that, as expected, the IMF which saw global growth at 3.8% one year ago, has cut its forecast 4 times in the past 4 quarters, and a 3.1% this is the lowest global growth rate going back to the financial crisis.
And while a Chinese growth cut is just a matter of time, even if the trajectory is all too clear...

... the biggest problem had nothing to do with any particular country's GDP growth, but with what has emerged over the past year as the biggest threat to global growth: the lack of trade. Sure enough, the IMF just cut its 2015P trade forecast from 4.1% to 3.2%, and putting the collapse in global trade in context, back in 2011 the IMF saw 6.9% in global growth. This number is now down nearly 60% 4 years later to a paltry 3.1% and sliding fast.
Why is this a problem? Because while central banks can reflate asset values all they want, they can't print trade, and a global world needs trade more than anything to grow.
Source: IMF
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Looks just like what was going on before WW1 but with new actors in the staring roles.
Those who remember history are condemned by those who repeat it.
"They can't print trade" But they sure as hell will try!
Yes, they will try: TPP, TTIP, ZIRPTTTPP....
There is no way they can believe their own forecasts. Nobody could be that clueless. I mean they HAVE TO KNOW the reality and they HAVE TO KNOW they're just spitting out propoganda. Right?
Please tell me they know they're lying. The alterntaive- that they DON'T know they're lying- is much more terrifying.
All you really need to know is that: When it becomes serious you have to lie. Which is always when it comes to the IMF lizard people.
Propoganda was legalized on 2012
http://www.businessinsider.com/ndaa-legalizes-propaganda-2012-5
They can't tell the truth because that WOULD crash the world economy, so they hope for an 'unexpected' miracle. Everybody looks at the DM economies and pretends that the EM has no effect...right up until the defaults start.....
U think u will like the plan B ?
NIRPUSRIP
Obama and his cronies never learned history....too busy on black studies and effective lying for profit
funny you said that because Brzezinski said:
US should attempt to disarm Russians in Syria:http://presstv.com/Detail/2015/10/06/432230/US-Syria-Russians-Brzezinski
Judging from the comment section, nobody is buying his bullshit.
OK, that was special. The Russians are there at the invitation of Syria, we are there because...ummm......
They do seem to be reading from the book don't they...
" the biggest threat to global growth: the lack of trade"
TPP passing will help lead us straight to globalization where every laboring US citizen will be thrown into the global wage rate pile. Unlike some EU countries that protect their citizens and borders our leadership will sacrifice our future for a greater global socialist good; equality, equality at last.
Notice how every projection is positive. Happy Happy. Until folks start reporting the truth. That things really aren't Happy Happy everywhere all the time. Assume they are lying to you and take it with a grain of salt or ignore them.
"Recovery starts tomorrow."
Sign inside the IMF.
"Free Beer Tomorrow"
Sign inside my local bar.
BEER ! HEAR! HEAR!
https://thatguybloke.wordpress.com
funny the sign at the FED says "QE tomorrow and next year" been there for a number of years!
Somehow these bankers and Gov. shills forget that the US consumer is tapped out and as it is the largest economy in the world, all others are suffering. Funny how that works when you leave the biggest part of the equation out of the discussion.
They don't forget...they just run a biggest deficit and leave you with the bill. Then move their money offshore
Thank the lord for professional Keynesian economists, what would we do without them?
But IMF projection for world growth is still a hockey stick, so we're all right.
What has more integrity? IMF forecasts or toilet paper?
IMF is just a criminal organization that exists to serve its masters - USA and EU.
The IMF Itself Is a Criminal Organization
To understand this story, you have to reel back to the birth of the IMF. In 1944, the countries that were poised to win the Second World War gathered in a hotel in rural New Hampshire to divvy up the spoils. With a few honourable exceptions, like the great British economist John Maynard Keynes, the negotiators were determined to do one thing. They wanted to build a global financial system that ensured they received the lion's share of the planet's money and resources. They set up a series of institutions designed for that purpose – and so the IMF was delivered into the world.
The IMF’s official job sounds simple and attractive. It is supposedly there to ensure poor countries don’t fall into debt, and if they do, to lift them out with loans and economic expertise. It is presented as the poor world’s best friend and guardian. But beyond the rhetoric, the IMF was designed to be dominated by a handful of rich countries – and, more specifically, by their bankers and financial speculators. The IMF works in their interests, every step of the way.
http://www.realclearworld.com/2011/06/03/the_imf_itself_is_a_criminal_or...
or
The IMF is as useless as a wet roll of toilet paper?
Because while central banks can reflate asset values all they want, they can't print trade.
I'm sure some of their 'models' say they can.
That right there is the problem.
Looks like a lot of optimistic check marks.
they still haven't figured out that it can be a negative number
As investors peer over the precipice, Citi says "C'mon! Waddaya, some kinda chicken?"
and on that bad news, The FTSE rises.
Looks like WWIII.
Gold trade note.
How do you trade or plan when you have big currency swings and asset prices are so distorted that it's difficult to value anything? Not only that, but we have major over capacity issues in all sectors and major missallocation of capital issues all thanks to years of ZIRP. But that's not the worst, things are really going to get bad when fed shoves NIRP down our throats to maintain the status quo.
wrong question....the FED doesn't seem to meet it LGBT quote....Jenner for FED!
Has it got something to do with this?
http://www.cdbaby.com/cd/thatguybloke
Print trade.....the opposite will happen...trade protections are coming..just like the first great depression...the politicians just cant stop themselves....
*Way off topic----
New York federal prosecutors just charged the former U.N. General Assembly President, John Ashe with accepting more than $1 million bribes...
darn...I thought it was going to be Corzine?
how odd...raising asset prices for the wealthy...doesn't help people with falling incomes. Maybe Krugman could explain?
Almost at escape velocity........full speed ahead!
I think Christine LaGarde has a hockey fetish. She sure seems to like their sticks.