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This article was published on 20 January 2015 to 07:11 hours.
The last change is the January 20, 2015 at 08:00.
The cuts stronger growth forecasts are for Italy, but also the other major Eurozone countries, where monetary policy is “slow to respond”, grow less than what was expected in October.
The IMF publishes today its new economic forecasts (the update of the World Economic Outlook) and, despite the sharp drop in oil prices and the improvement of the United States, global growth is lower than estimated three months ago. “New factors supporting growth – says Olivier Blanchard, chief economist of the organization in Washington – as the fall in oil prices, but also the depreciation of the euro and the yen, are more than offset by the persistence of negative forces, including the legacy of the crisis and the weaker potential growth in several countries. “
For Italy, the IMF cut its estimates of half a percentage point this year and next year and now forecasts growth of 0.4% in 2015 (in line with the expected Bankitalia ) and 0.8% in 2016 (Bankitalia instead provides a + 1.2%), after a contraction of 0.4% in 2014 and 1.9% in 2013. The euro area should, as other industrial countries, take advantage of low oil, as well as the devaluation of the euro, of relaxing monetary policy and fiscal policy less restrictive, according to the IMF, but its growth is less than expected, in this case of ’1.2% this year and 1.4% next. These figures are more or less in line with those of Germany, but it is each other have been reduced compared to the estimate of October. The only one of the big eurozone countries that resists cuts economists IMF is Spain, which is expected to grow by 2% this year, a 0.3% increase compared to the estimates of three months ago.
For the Eurozone, says Blanchard, we expected a rebound in investment, which has not materialized and that probably depends on weak demand also in exports, due to the slowdown in emerging markets. “It is possible that we are too pessimistic about the positive effect in the coming months of the fall in the price of oil,” says the chief economist of the Fund. The analysis of the IMF notes that inflation in the euro has dropped again and new negative shocks, internal or external, may lead to lower inflation persistently or a decline in prices, given that monetary policy is slow to respond. For some time, the IMF argues that the European Central Bank should adopt new monetary stimulus, including the purchase of government bonds, which could be finally ruled Thursday.
At the global level, the expected growth was reduced by 0.3% over the next two years and should stop at 3.5% in 2015 and 3.7% in 2016. The only unequivocally Positive is the United States (which will grow by 3.6% this year and 3.3% next year, better estimates of October), thanks to a more robust domestic demand, while also Japan, which in the third quarter of 2014 has fallen back into a technical recession (two consecutive quarters of contraction), is struggling to respond to the massive stimulus action of the authorities. The Fund then see an accentuation of the divergence between the United States on the one hand and euro area and Japan on the other.
In the emerging and developing countries, the growth in the next two years should remain more or less stable, but in this case has been reduced compared to the estimate of October, for three reasons: China, Russia and the impact of declining oil on exporting countries, as well as the difficulties of other raw materials . In China, Blanchard says, the authorities are taking the right steps. Right now seem more concerned to heal the vulnerability, for example in the financial sector, which to push growth. Russia will close 2015 with a negative growth of 3%, while October was expected to expand by 0.5%, and also will contract in 2016, as a result of the collapse of oil and sanctions. According to the EBRD, the bank that operates in Eastern Europe, which in turn has released its forecast yesterday, the Russian economy will contract by as much as 4.8% this year and this will drag in recession throughout the region, which accuse a negative growth of 0.3%, according to the Londo n institution. Even this forecast is subject to considerable risks, note the EBRD.
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