While the headline growth predictions of the International Monetary Fund remain unchanged, the underlying details of its forecasts are surprisingly different, says National Bank Financial in a new report.
The IMF expects the global economy to expand at a robust 4.9% rate in 2007, NBF says. “Even if this growth rate is identical to that predicted in its September 2006 world outlook, the IMF nonetheless proceeded with some very significant adjustments,” it adds.
“The most remarkable was in fact to keep unchanged its forecast for the global economy despite a significant downward revision to its U.S. growth forecast (from 2.9% to 2.2%),” NBF says.
“The IMF is actually predicting something that has never happened before during a global expansion: a robust world economy with the U.S. accounting for less than 10% of global growth in 2007 (or half its normal share of global growth),” it says.
“While we have little doubt that such a pattern could become common in the future, we remain sceptical that China and India, are already fully immune to a U.S. slowdown given their high dependence on exports to generate growth,” NBF concludes.
World economy on track despite U.S. slowdown
IMF predicting something that has never happened before during a global expansion, NBF says
- By: IE Staff
- April 12, 2007 April 12, 2007
- 10:50