Editor Pick – The global economy continues to grow strongly
The IMF has released an update of the key WEO projections.
Main points:
- global growth is now projected at 5.2 percent in 2007 and 2008;
- growth projections substantially marked up for China, India, and Russia;
- growth in the U.S. now expected at 2% in 07 (0.2% lower than Apr 07 WEO forecast) – the correction in the housing sector is continuing, overall downside risks related to U.S. domestic demand have diminished somewhat;
- overall balance of risks to the global growth outlook remains tilted modestly to the downside;
- sustained strong growth, supply constraints are tightening and inflation risks have edged up since the Ap 07 WEO, increasing the likelihood that central banks will need to further tighten monetary policy;
- risk of an oil price spike remains a concern;
- some progress has been made toward reducing risks of a disorderly unwinding of global imbalances, although protectionist pressures are a continuing concern.
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