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World Economic Outlook April 2013
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World Economic Outlook April 2013

Hopes, Realities, Risks

Olivier Blanchard
IMF, 2013
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Editorial Rating

8

Qualities

  • Analytical

Recommendation

The International Monetary Fund has produced a clear outlook for the global economy. The picture is generally bright with a few issues on the horizon. If the global economy were a horse race, there would be three packs: China and emerging markets in front; the United States, Canada and Japan in the middle; and Europe lagging behind. For all the volatility the recession introduced, inflation has hardly shifted, suggesting that perhaps central bankers may have learned how to manage that important part of the economy. Though the paper’s language can be stiff at times, it’s tempered by the report’s eye-catching graphics and illuminating insights. getAbstract recommends this authoritative look at the world economy to executives and investors.

Summary

A Three-Pronged Recovery

The global recovery from the recession that started in 2007-2008 split the world’s economies into groups: Strong growth in the emerging markets and developing economies coincided with tepid growth in the developed countries. You can view the world now as a three-horse race, with the developing world leading the way, the United States remaining in the middle, and the euro zone bringing up the rear. The IMF expects emerging markets to grow at a pace of 5.3% in 2013 and 5.7% in 2014. China will lead the world with growth rates of 8% in 2013 and 8.2% in 2014. Well back in the pack – all the way behind India, Brazil and Mexico – is the US, with growth of 1.9% in 2013 and 3% in 2014. Canada and Japan are also in this group. The euro area should shrink by 0.3% in 2013 but grow by 1.1% in 2014.

Regional Aspects

The US economy in 2013 is limping along too slowly to create the millions of jobs that the American labor market demands. But low interest rates and renewed interest in homes and durables will drive its economy in 2014. The US faces crushing debt. The sequester eased concerns about the immediate sustainability of the nation’s debt burden...

About the Author

Olivier Blanchard is economic counselor and director of research at the International Monetary Fund.

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