The International Monetary Fund is concerned that the recovery in developed countries isn’t strong enough to ensure stability in the coming years, said the latest IMF forecasts; this forecast of 2015 shows the worst figure for the world’s economic growth for the last six years. the expectations are around 3% growth for the whole world.
“Latin America is the region that comes out worse,” which is explained “by their dependence on raw materials exports to China.” Spain, however, remains with an intact forecast (+ 3.1%) and “remains the country with the highest growth rate among the major advanced economies.” The reason is the fall in oil prices offset a possible slowdown in exports and also that so far “the IMF was somewhat pessimistic with Spain”.
“Adjusting to lower prices of raw materials.” China, the economy sets the pace in demand for commodities does not grow as before. Exporters of metals, oil or food, good emerging part or developing, suffer. And the recovery in advanced economies up to “persistently modest pace”. So what is adjusted downward, it is forecasting growth.
“For emerging markets and developing countries, our prediction is that 2015 will be the fifth consecutive year of declining growth,” says the new IMF chief economist, Maurice Obstfeld, in introducing the report, presented Tuesday in Lima (Peru), which is hosting this week’s annual meeting of the body. Five years of weak progress will result in an increase of 4% of GDP this large and heterogeneous group of countries, led by China, India, Brazil or Russia. A very low rate for which it has been the engine of global growth: in the last two decades, only in 2009 (3.1%), after the Great Recession in advanced economies and in 2001 (3.8%) when bubble burst dotcom, advanced at a lower rate. In the anteroom of the Great Recession in 2007, emerging and developing countries grew 9%. And China, by 14%.
The new forecast is striking that while “slowing growth of China” is the essential reason for the worsening outlook for the rest of the emerging economies (and some advanced), the Asian giant escapes these downward revisions. Neither the steepest fall in the Shanghai Stock Exchange this summer, and the growing evidence that the investment or industrial production have stopped marching apace, vary the estimates of IMF experts, who include new support consumption private. Since earlier this year, the Fund estimates that China’s GDP will grow 6.8% in 2015 and 6.3% in 2016.
“The impact of China’s slowdown beyond its borders are higher than initially estimated,” justifies the Fund. “This is reflected in a fall in prices of raw materials and exports, weaker, to China,” he adds. Oil prices have fallen by 46% last year, according to IMF data, while the price of major metals has fallen 22% and food 17%. The Fund anticipates that this period of low commodity prices will last at least two years, and detract from 1 to 2.25 percentage points to annual growth of exporting countries between 2015 and 2017.