Sunday, April 19, 2015

IMF Spring Meeting Updates

The IMF released some updated outlooks this week with their spring meetings in progress. Below are a couple of articles on how the IMF sees things at this point. Below each link is a summary quote and comment.


Surging Dollar boosts Europe and Japan as US slows

"The strengthening dollar is boosting growth in the euro area and Japan while taking some steam out of the U.S. recovery, the IMF said in its latest forecast.

The Washington-based crisis lender cut its U.S. expansion forecast by 0.5 percentage point to 3.1 percent, still the fastest among major developed economies. The Japan growth outlook increased to 1 percent from 0.6 percent and the euro area is projected to expand 1.5 percent as weakening currencies provide a “welcome boost,” the IMF said.     . . . . .

The strong dollar is blunting the reemergence of the U.S. as the world’s primary growth engine as Federal Reserve officials led by Chair Janet Yellen consider when to raise their benchmark lending rate. The global economy risks becoming mired in a “mediocre” recovery if policy makers don’t take bolder steps to boost growth, IMF Managing Director Christine Lagarde said in a speech ahead of this week’s meetings of central bankers and finance ministers in Washington."

Low Oil Prices Cost Exporters more than they help Importers IMF says

"Tumbling crude prices will cost oil producing countries fiscal losses worth about 4 percent of their economies this year, the International Monetary Fund said, listing Venezuela and Iraq among those most severely hit.
Oil importers in emerging and developing countries stand to gain average fiscal savings of 1 percent of gross domestic product, the IMF said in its Fiscal Monitor report released Wednesday.
Focused on the shape of governments’ finances, the report also pointed to the “triple threat” of low growth, low inflation and high debt in advanced economies. In the U.S., the IMF urged a medium-term deficit reduction plan to deal with the anticipated high cost of aging baby boomers, “long-overdue” tax simplification and infrastructure investments."
My added comments:
There is no real significant news coming out the the IMF spring meetings. They just repeat the same warnings and tweak their forecasts a little bit. The main event that could impact the global financial system in the next few months appears to be how the situation in Greece is resolved. But unless something happens there that leads to contagion, that risk is probably contained. For now, things seem relatively calm despite ongoing problems here and there around the world. It's looking more and more like it will be this fall before we get any significant news with the review of the SDR currency basket coming up.

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