Making fun of the IMF, which has become a quarterly tradition here, has an increasingly sad aspect to it: like picking on a mentally disabled person, and we do it with the greatest of reservations. However, we will continue doing it becuase today, in addition to its latest set of global and regional growth projections, the IMF has provided some serious ammo for mockery but most notably, it is now making fun of itself too!
First, here is the latest summary of IMF GDP expectations, as mapped by the organization itself.
The IMF's detailed breakdown by country and region is below...
... however the reason we would suggest ignoring it, aside from the IMF's own abysmal forecasting track record...
... is two fold.
First, in an appendix titled "Private Investment: What's the Holdup" in which the IMF asks "Is There a Global Slump in Private Investment?", the organization clearly has missed the memo of the past two years in which courtesy of global ZIRP (and NIRP) companies are far more incentivized to buy back their own stock and generate instant returns for management and shareholders than to invest in the future and in "private investment."
While we give the IMF a few years to figure this out, we were amused by the IMF's own mockery of itself, when it showed how its own forecasts of private investment in 2004 and in 2007 turned out relative to, well, reality. They need no commentary
But the biggest reason why we would avoid anything the IMF forecasts like the plage, is taken from its 2016 GDP forecast for Europe (a continent which the IMF now sees growing by 1.5% and 1.6% in 2015 and 2016 mind you, forecasts which will soon be revised far lower once the ECB's QE fails to boost anything but tock markets).
It is in this forecast that we find that the IMF assumes that the fastest growing nation in the Eurozone in 2016 will be, drumroll...
Yes, Greece, the same country which moments ago the IMF's chief economist Blanchard admitted may very well not be in Europe!
- IMF VERY MUCH WANTS TO COME TO AGREEMENT WITH GREECE: BLANCHARD
- GREEK EXIT FROM EURO WOULD BE COSTLY, PAINFUL: BLANCHARD
So yeah. Comedy.
But, the one chart that actually does matter, and which is truly critical for a world in which central banks may print all the money they want, but can't print trade, which as recent Chinese trade data show is crumbling, is the IMF's forecast of global commerce and trade. Alas, not even the IMF can put lipstick on this particular pig, which screams two simple words: "secular stagnation."