It's that time in the quarter again when the IMF releases its latest comedy hour script, also known as its World Economic Forecast, this time for October, "predicting" what growth in various countries and around the globe, as well as trade will look like for the next two years. We have repeatedly covered why this is one of the most hilarious periodic debacles of conventional economics as the one thing the IMF is sure to get right is that it will be wrong about everything (but it sure won't stop trying, for example we are confident the IMF's projection of 2022 Greek GDP is still "spot on"), so we won't waste more time on the preamble.
So without further ado, here is the complete history of the IMF's quarterly forecast revisions of growth since 2012, in charts.
First, the good news, if only for now: the United States, which is the only country to see its 2015 GDP forecast increase, or rather hockeystick, from 2.2% to 3.1%. Good luck with that, considering the end of QE and the whole soaring USD thing.
However, any optimism about the US is promptly crushed by the ongoing economic destruction that is taking place in Europe. And while the 2015 GDP forecast was cut to the lowest in the series, from 1.5% to 1.3%, considering Europe is now unofficially in a triple-dip recession, look for the 2015 print to quickly go negative over the next 1-2 IMF WEO releases.
Then there is China, which curiously, this time was left unchanged across the entire curve. We doubt it will remain there when forecast becomes history, even though this is the one country where the IMF no longer believes in the hockeystick.
And then here is "the world", which was supposed to grow by 4.1% in 2013. Instead, the 2015 forecast was just cut from 4.0% to 3.8%. And that, of course, includes a hockeystick from 2014, which back in 2013 was supposed to grow by 4.1% and is now the lowest it has been at 3.3%. In fact, spot the trend foe 2012, 2013 and 2014 global GDP forecasts: 3.4%, 3.3%, 3.3%.
And most disturbing of all, and the chart which will as usual be ignored as much as possible because central banks can not print trade, is the IMF's ever deteriorating outlook for global trade. It was supposed to rise 5.5% two years ago. Now it just hit cycle lows of a meager 3.8%, and certainly going far lower.
Finally, the IMF's most favoritest chart: