By Isaac Cohen*
The global economic recovery has picked up strength, in an “accelerating cyclical upswing” that now includes the most advanced economies—Europe, Japan, the United States and also China and emerging Asia. In these terms, the Economic Counsellor and Director of Research Maurice Obstfeld, of the International Monetary Fund, presented the institution’s flagship publication in Washington DC. (http://www.imf.org/en/Publications/WEO/Issues/2017/09/19/world-economic-outlook-october-2017?cid=em-COM-123-36015)
The projections of global growth contained in the new World Economic Outlook have been slightly upgraded, to 3.6 percent in 2017 and 3.7 percent in 2018, an increase of 0.1 percent in each year over the projections presented last April. This is better than the global growth rate of 3.2 percent in 2016, which was “the lowest” registered since the financial crisis of 2007-09.
The Fund sees short-term risks as “broadly balanced,” while for the medium-term they are “skewed to the downside,” with several “potential hazards.” Among them, global financial conditions may be tightened in the advanced economies and as a consequence some emerging market economies could experience financial turmoil. Additionally, low inflation may persist in the advanced economies, together with two policy alternatives which could hinder global growth, such as a reduction in financial regulation and a “shift toward protectionism.”
Even so, the Fund concludes positively saying the “cyclical pickup in global economic activity” provides “an ideal window of opportunity, to undertake key reforms designed to boost potential output and ensure that its benefits are broadly shared.”
*International analyst and consultant. Commentator on economic and financial issues for CNN en Español TV and radio, UNIVISION, TELEMUNDO and other media. Former Director, UNECLAC Washington.
