Stronger growth ahead - the latest forecasts from the IMF
All eyes on Washington today - first up and just released is the IMF’s latest economic view of the world - out later is their financial stability report ...
The IMF now believe the world economy did not contract as much last year as they previously feared and they have also revised up their forecast for global growth this year.
Their latest thinking is shown in the chart here.
To see how their thinking has shifted, compare their recent forecasts
forecast made in Jan 2020 3.3% 3.4%
in April 2020 -3.3% 5.7%
in June 2020 -5.2% 5.4%
in Oct 2020 -4.4% 5.2%
in Jan 2021 -3.5% 5.5%
Latest forecast -3.3% 6.0%
and by region, the clear message is regional divergence.
The IMF’s forecasts are in line my thinking - once economies emerge from the health crisis they can rebound solidly - seen in their global view. Also note the strength of the US rebound, down 3.5% last year, IMF forecast up 6.4% this. Asia too, down 1% last, up 8.6% this.
The IMF sees the euro area taking some time to return to their pre-crisis level - euro area down 6.6% last year and IMF sees it up 4.4% this & 3.8% next.
Also the IMF sees a solid rebound in the U.K. up 5.3% this & 5.1% next - I think the U.K. rebound will be stronger than this ... as noted in my recent piece for City AM and Netwealth.
I think the IMF are right to call China growth up 8.4% this year after 2.3% last. Recently the official forecast from China seemed too low at 6%. Also I agree with IMF view of 12.5% growth in India this year after 8% fall last year.
A summary of their forecasts: