IMF cuts GDP forecasts, says global economy heading for weakest growth since 1990

[BumRushDaShow]

Source: CNBC

The International Monetary Fund on Tuesday released its weakest global growth expectations for the medium term in more than 30 years.

The D.C.-based institution said that five years from now, global growth is expected to be around 3% — the lowest medium-term forecast in an IMF World Economic Outlook since 1990.

“The world economy is not currently expected to return over the medium term to the rates of growth that prevailed before the pandemic,” the Fund said in its latest World Economic Outlook.

The weaker growth prospects stem from the progress economies like China and South Korea have made in increasing their living standards, the IMF said, as well as slower global labor force growth and geopolitical fragmentation, such as Brexit and Russia’s invasion of Ukraine.

Read more: https://www.cnbc.com/2023/04/11/imf-world-economic-outlook-april-2023-weak-growth-forecasts-inflation-high-until-2025.html

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Link to outlook page - https://www.imf.org/en/Publications/WEO/Issues/2023/04/11/world-economic-outlook-april-2023
Link to report (PDF) - https://www.imf.org/-/media/Files/Publications/WEO/2023/April/English/text.ashx

[cachukis]

1. Perhaps a good thing.

[Marthe48]

2. Ecomony loses steam as fascism ascends

Too early to notice parallels? Too late to head off another era of world-wide dictatorships?

[IronLionZion]

4. It's never too early or late for "they're stealing our jobs"

it just sounds dumber when "nobody wants to work anymore".

The rise of fascism in many countries is very concerning.

[Meadowoak]

3. As much as they've raised interest, the banking class should have a red

Letter year, those of us that have to pay that interest, not so much.

[ImNotGod]

5. just what the republican run Fed wants to hear before the next election nt

[peppertree]

6. They're trying to trigger a recession alright

Like what Greenspin did to Al Gore in '99/2000.

You'll recall there was practically no inflation - and yet the old lizard was raising rates like there was no tomorrow ("irrational exuberance" and such).

And it worked: the economy slowed down just enough to give Dubya and the Liver Lips brigade room to cheat. The rest, as they say, is history.

So you bet they're trying that playbook again.

That said, I'd like to extend a belated Welcome to DU. Happy typing!

[progree]

7. Yup, they sure were serious about meeting the 2% target

Last edited Wed Apr 12, 2023, 03:05 AM - Edit history (1)

Below is a graph of the Federal Reserve's target interest rate and the CPI from 4/1998 to 12/2001


# CPI: https://data.bls.gov/timeseries/CUSR0000SA0
(In "More Formatting Options" at the upper right one can change/add 2 month, 3 month, 6 month, and 12 month rolling averages, as well as show the 1 month changes. All with graphs.

# Fed Funds Target Rate (until 2008) -- https://fred.stlouisfed.org/series/DFEDTAR
  (Context: it spent most of late 94 to late fall 98 at above 5%),

Per the NBER, the recession began March 2001.

I suspect likewise that nowadays the Fed is serious about the 2% target, but mindful of not crashing the banks. Core PCE is well over 4% on a rolling averages basis. https://www.democraticunderground.com/10143053501#post5

I'm frankly surprised that so many think the Fed is going to let inflation sit at more than twice their target rate, and that the 2% target is just for shits and giggles.

A 3.5% inflation rate (the peak plateau level shown in the above graph) may not be red-hot, but it's enough to cut the purchasing power of the dollar in half in about 20 years, and down to a quarter in 40 years.