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World Economic Outlook: Global Economy On Mend; U.S. Growth Sluggish
The International Monetary Fund released its biannual World Economic Outlook today. As the parsing of the data begins, here are some headlines that have emerged:
-- Oil Prices Risk Solid Global Recovery: The unpredictability of the oil markets worries IMF economists, reports the AFP. The IMF worries that unrest in the Middle East and the oil cartel's slow movement on adjusting productioncould mean higher prices. It forecasts the price of oil will average $107 a barrel in 2011, compared to $79 in 2010.
-- The Chinese Yuan Weaker Than It Should Be: The IMF said that while the Chinese government's efforts to keep the Yuan low could be boosting economic activity in China, it could hurt the global economy, because as The Wall Street Journal writes, "delaying required internal adjustments in some countries is contributing to excessively rapid credit growth and asset price booms." The statement by the IMF, reports the WSJ, could help the U.S. in its efforts to convince the Chinese to let the markets decide the valuation of the Yuan.
-- Revising U.S. Growth: The IMF revised its estimate for U.S. economic growth to 2.8 percent in 2011 and 2.9 percent in 2012, from the 3 percent and 2.7 percent growth it had predicted in January, Reuters reports. It also said the Federal Reserve should keep "easy monetary policy in place while the government comes to grip with its debts."
-- Global Recovery Will Not Be Derailed: The mile-high view is that the world recovery will continue over the next two years and, the Los Angeles Times reports, it "will not be derailed by the earthquake in Japan or the surge in commodity prices:"
The world economy is set to grow 4.4% in 2011, down slightly from 5% in 2010. Growth will accelerate slightly to 4.5% in 2012.
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