Posted on 12/30/2015 4:56:09 AM PST by mac_truck
Global economic growth will be disappointing next year and the outlook for the medium-term has also deteriorated, the head of the International Monetary Fund said in a guest article for German newspaper Handelsblatt published on Wednesday.
IMF Managing Director Christine Lagarde said the prospect of rising interest rates in the United States and an economic slowdown in China were contributing to uncertainty and a higher risk of economic vulnerability worldwide.
Added to that, growth in global trade has slowed considerably and a decline in raw material prices is posing problems for economies based on these, while the financial sector in many countries still has weaknesses and financial risks are rising in emerging markets, she said.
"All of that means global growth will be disappointing and uneven in 2016," Lagarde said, noting that mid-term prospects had also weakened as low productivity, ageing populations and the effects of the global financial crisis dampened growth.
In October the IMF forecast that the world economy would grow by 3.6 percent in 2016.
Lagarde said the start of a normalization of U.S. monetary policy and China's shift toward consumption-led growth were "necessary and healthy" changes but needed to be carried out as efficiently and smoothly as possible.
There are "potential spillover effects", with the prospect of increasing interest rates there already having contributed to higher financing costs for some borrowers, including in emerging and developing markets, Lagarde said.
While countries other than highly developed economies were generally better prepared for higher interest rates than previously, she was concerned about their ability to absorb shocks, she said.
Emerging market companies with debt in dollars and revenue in sinking local currencies could struggle as the Fed begins what is expected to be a series of interest rate increases.
(Excerpt) Read more at reuters.com ...
3.6% is funny. These central bank economists could not be bigger failures..but they keep getting promoted
4 trillion in QE but Zuckerberg made out huge on his stock. Most of America..not so much
Obama’s Economy is so Cooked the Books like his terrorist reports
Less than one-third of one percent of FB's capital comes from debt financing.
The two things are about as related to one another as AAPL's stock price is to Joe Biden's haircut.
you can bet that Christine Lagarde will be collecting her annual bonus this year, and next year too ...
The IMF gets it wrong about the global economy on a regular basis, but revising a world forecast made only two months prior is egregious.
Monkeys throwing darts would have a better record!
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