Helping us get real – the IMF owns up to the recession

The IMF has issued revised forecasts for Advanced Economies’ output in 2009. They have revised their forecast from 0.5% growth (made a month ago) to 0.3% shrinkage. They forecast US output change of -0.7%, EU change of -0.5% and Japan change of -0.3%. (Emerging market and developing economies still to grow at 5.1%.)

Admitting that there is an economic recession is healthy because it will help all of us focus on the need to plan for changes in out homes, businesses and investment, if we haven’t already. It is useful coming from an elite, global, multilateral group like the IMF because it will help those of us who still imagine that there will be a new boom in January to get real.

They also offer good advice for governments and policy makers to stimulate their economies. This means fiscal stimulus, not simply monetary stimulus. In other words, reduce taxes (on the middle and lower income groups) and increase project spending, such as infrastructure development and maintenance.

IMF press release.

Updated World Economic Outlook with revised forecast.

You know it's bad when luxuries are discounted.
World in crisis ...

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