In the coming months, the international monetary Fund (IMF) expects the biggest rise over the last decade. “Recent evidence suggests that the world economy will have the biggest simultaneous lifting of the decade,” write the economists of the IMF in the “world economy Review”.
Experts in the field of Economics in its report slightly raised growth forecasts in almost all regions of the world; for example, for Germany, the entire Euro area, Central and Eastern Europe, Japan, China and developing Asian countries. As expected, the global economy will grow this year by 3.5% and next year by another 3.6%.
It becomes clear that Europe will be the main force of the world economy in the coming months. In addition to the continuously strong economic activity in Germany, this contributes to the return of the crisis countries; for example, this year it is expected that the Spanish economy will grow by more than 3%. “Growth expectations for 2017 for many countries in the Eurozone have been revised upwards, write the authors of the report. — Inter alia, France, Germany, Italy and Spain, where growth in the first quarter was generally stronger than expected.”
Analysts are disappointed in the policy of trump
The IMF experts believe that the European economy is capable of more. “In the short term we see the possibility that the economy in continental Europe will grow even stronger, because political risks have dropped.” Currently, they proceed from the fact that the Euro area this year will grow by 1.9%.
But on the other side of the Atlantic, there was a completely different situation. The Fund’s economists have lowered growth expectations for the United States. “From a global point of view, our less optimistic view on the U.S., of course, was the most substantial downgrade,” says Maurice Obstfeld (Maurice Obstfeld), chief economist of the IMF. With colleagues they lowered the forecast for US for 2017 and 2018 due to cuts in government spending, which was expected in April.
The IMF and the financial markets were expecting the US President trump relatively quickly initiates its declared infrastructure program. But after the new government has started to move from one bad bill to another, to the observers, and apparently returned to sanity. Back in may, trump announced the allocation of $ 200 billion on infrastructure in the next ten years — far less than the promised trillion US dollars.
Negotiations Bracito — huge risk
“Markets are also expecting an additional reduction in state spending,” the report says. In his review of the further development economists have also called one of the biggest risks to the economy of the inept policies of President trump and it has triggered uncertainty — not only in USA but throughout the world.
Negotiations Bracito IMF economists also believe the biggest risk to further economic development, especially in Europe. In the UK the economic consequences of the continuing uncertainty is palpable now. After a disappointing performance in the first quarter of the experts in Economics the mass adjusting expectations for the UK by 0.3% to the downside.
Now they expect the UK economy will grow this year by 1.7%, and only 1.5 percent. And the biggest risk for emerging markets could be the rising interest rates in the U.S. because many of the affected countries have debts in dollars.