By Isaac Cohen*
With the start of this year’s Spring Meetings, the International Monetary Fund released the World Economic Outlook, its flagship publication. Global growth forecasts have been revised downward to 3.2 percent for this year and 3.5 percent for 2017. According to the Fund’s Economic Counsellor and Director of the Research Department, Maurice Obstfeld the fundamentals of the world economy are fragile, with potential risks. Among these last are financial turbulence, a sharper slowdown in China, lower oil prices and some noneconomic shocks, such as terrorism, refugee flows or global epidemics.
Growth in the advanced economies has lost momentum. This year, the US economy is projected to grow 2.4 percent, while in the euro area and Japan growth will remain modest at 1.5 percent and 0.5 percent, respectively. By contrast, growth will remain uneven in emerging market and developing economies. Some emerging market economies, such as Brazil and Russia are in recession, while India remains a bright spot and China slows down in transition to more sustainable growth based on consumption and services. In Latin America the outlook for commodity exporters remains weak, with the exception of Mexico and Central America, both benefitting from the US recovery and the latter benefitting also from lower oil prices.
*International analyst and consultant. Commentator on economic and financial issues for CNN en Español TV and radio. Former Director, UNECLAC.