Friday, October 16, 2015

The Economist: Review of IMF and World Bank Meeting in Lima Peru

The Economist reviews the most recent IMF and World Bank meetings held in Lima Peru. They describe the atmosphere as "gloomy" as it appears the global economy may be about to head downward in growth. Below are some quotes from the article.

"As LIMA bid farewell to the annual jamboree of the International Monetary Fund and World Bank on October 11th the leaden sky that greeted the global economy’s great and good earlier in the week had cleared. But among the 12,000 delegates, policymakers, their retinues, academics and do-gooders departing the Peruvian capital, the mood was distinctly unsunny. Clouds will continue to hang over the global economy in the foreseeable future, all agreed; anxieties over China’s slowdown, weakening emerging markets, and the effects of the Federal Reserve’s decision to hold steady on interest rates have done nothing to dispel them.
At least, quipped those optimistically inclined, sentiment on October 11th was no worse than on October 6th, when the IMF cut its forecast for global growth this year to 3.1% and to 3.6% next. Indeed, the meetings that took place in Lima brought little new information. There were the usual platitudes about the need for structural reforms. There were expressions of "deep disappointment" over the American Congress’s sad refusal to ratify the 2010 reform of the global financial institutions to allow greater say to emerging economies."
My added comments: 
The tone of this article is clearly downbeat. It sounds like there is growing concern that the economy has peaked out and many are worried about a coming downturn. The mention of the ongoing refusal of the US Congress to ratify the 2010 IMF governance reforms just emphasizes how everything seems grid locked at the global level in terms of moving forward with any kind of global cooperation at the IMF.

All of this fits in with the idea that for now things seem stagnant as we wait to see if anything leading to significant change in the monetary system will unfold any time soon.

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