Posts Tagged ‘IMF’
I have read enough economic forecasts over the last 2 years to realise that this forecast from the Japanese government is the first time that government has recognised the obvious that the situation we are in is not going to resolve quickly.
I am a firm believer in this being an L shaped recovery, and this report points in that direction. There is just too much lag built into the shift we have experienced. With such a dramatic and permanent drop in asset values we have seen, the natural deleveraging impact will take years to work through the system.
TOKYO (Nikkei)–The world’s economic growth is likely to be limited to around 1% in 2010 on delayed recoveries in the U.S. and Europe, according to projections in a Cabinet Office report on global economic trends released Friday.
This prediction is less optimistic than those from such forecasters as the International Monetary Fund, which is calling for 1.9% growth in 2010, and the Organization for Economic Cooperation and Development, which projects 1.2% growth that year. Private-sector forecasts call for average growth of slightly more than 2%.
Researched by Nobuyo Henderson
In a much anticipated upward revision of earlier forcasts, the IMF is expected to increase its estimate of toxic assets, that is loans that should be written off, to $ 4 trillion. The new forecast is expected 21st April, and reported today by The Times.
The forecast apparently will cover primarily US-originated assets but this forecast introduces European-originated assets.
This represents the most ocnsequential statement of evidence yet, that this is a debt crisis which must be resolved before other elements of the banking system will return to any degree of normality.
It will also require changes at the top in those banks that are the worst culprits.
The head of the IMF continues to rightly focus on the need to clean up bank balance sheets. To ignore them remains a central cause of lack of confidence which will hinders economic prospects due to the uncertainty caused by doubtful asset values.
The more reason to adopt and move forward with Geithners measures right away.
Hard times call for hard measures | Financial Times
While there is no doubt that the forces for recovery are powerful, risks remain. Dominique Strauss Kahn, managing director of the IMF, told the Financial Times yesterday he expects recovery during the first half of 2010, “but the big ‘if’ is the speed of the cleaning up of [bank] balance sheets”.
Reference material | New economic documents – world economy with country specifics (close to 1,000 pages here)
For your reading pleasure | very credible stuff here with the latest on statistics and reference. Keep handy for that next strategy powerpoint. I will add to sidebar for later reference too.
IMF World Economic Outlok – update Jan 2009
The Future of the Global Financial System – World Economic Forum 2009
Annual Report 2008- World Economic Forum