The IMF has slightly downgraded economic forecasts and highlighted regional stagnation in its latest World Economic Outlook.
It certainly seems that some regions are more positive than they have been, and that seems related to good economic management.
It is not easy to be prescriptive in this increasingly complex world, but economic growth rates of 3-4% in mature economies still seems aggressive to me. When people point to the low level of economic activity in comparison to five years ago, they do not account for the bubble that then existed or make comparisons stretching a decade further back.
There remain reasons for improvements in efficiency, especially improved efficacy thanks to IT and technology in general, but the fundamental scope for increased consumption among rich countries seems limited.
The rebound in Ireland has been remarked upon and while “property prices are up 10% in Dublin” the fundamental pace of economic activity in our community remains stable, if not muted. Meanwhile regulations and taxes continue to raise the costs of doing business which makes it tough for SMEs which support so many local communities. Bigger businesses can continue to trade on tiny margins, massive distribution, extravagant advertising and lower capital costs, without necessarily being a part of any community.
It doesn’t have to be like that, but when so few, if any, architects of fraud have been penalised and vilified, the soundness of the whole system must be questioned.
Maybe the weak and uneven action taken over the GLOBAL FINANCIAL CRISIS contributes to the weak and uneven recovery.
IMF: World Economic Outlook (WEO) Legacies, Clouds, Uncertainties
BBC: IMF warns of ‘weak and uneven’ global recovery
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