Economists rarely make negative forecasts, partly because they become self-fulfilling prophecies. Even when they do forecast downturns, the predictions are surrounded by ifs.
The International Monetary Fund, for example, said today that global growth "will strengthen gradually" this year, as economic constraints "start to ease." That said, the IMF quickly adds a but, pointing out that "downside risks remain significant." As noted here last Sunday, we're not there yet, and there are still bumps on the road to economic recovery.
China and India are booming, leading the world with growth forecasts of 8.2 percent and 5.9 percent, the IMF said. The euro area is still struggling, however, with a high risk of more recession -- Germany and France, while healthy, face growth rates of less than 1 percent, with Italy and Spain still showing negative GDP growth. (GDP measures Growth Domestic Product, the value of all goods and services produced in a nation or area.)
U.S. recovery will slow, according to the IMF report, to 2.0 percent from 2.3 percent last year. Canada and the UK, moreover, are also in float mode -- both below 2 percent.
In short, the developing countries are developing big time, while the so-called advanced economies are stalled. And while "acute crisis risks" are lower, potential problems remain, the agency added in its CYA way.
So the recovery road may be less rough, but it's not yet smooth. Government policies can continue to help, but this is no time to say the crisis is over.
Washington made that mistake 76 years ago.
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