Delicate Moment

By Isaac Cohen*

                  The new Economic Counselor and head of the Research Department of the International Monetary Fund Gita Gopinath, last week in Washington, presented the World Economic Outlook, the institution’s flagship publication.  She described the current situation as “a delicate moment for the world economy,” characterized by “a significantly weakened global expansion” in the second half of 2018, which is “expected to persist into the first half of 2019.”

                  The Fund estimates that global growth in 2018 slowed to 3.6 percent and the projection for 2019 is that it will decrease to 3.3 percent. In fact, this projection has been revised downward from 3.7 percent last October and 3.5 percent in January. The slowdown in growth is projected for 70 percent of the global economy, which contrasts with the fact that most of the world economy was expanding in 2017.

                  The following factors are contributing to the global weakening: the trade tensions between China and the United States, credit tightening in China and monetary policy normalization in the advanced economies, together with macroeconomic stress in some emerging market economies, such as Argentina and Turkey.

                  The Fund’s projections do not foresee a recession, but identify “many downside risks,” such as the persistence of trade tensions and disruptions in major economies, as may be caused by Brexit in the euro zone, or less growth in China. Absent these risks, growth prospects are expected to improve by the second half of this year, with global growth returning to 3.6 percent in 2020.

    *International analyst and consultant, former Director ECLAC Washington. Commentator on economic and financial issues for CNN en Español TV and radio, UNIVISION, TELEMUNDO and other media.

About Ramón Jiménez

Ramón Jiménez, Managing Editor de MetroLatinoUSA.Com (MLN). Graduado de la Escuela de Periodismo de la Universidad del Distrito de Columbia (UDC). Email: [email protected]

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