Global Outlook—Still Three Speeds, But Slower

Today we released our update of the World Economic Outlook. The world economy remains in 3-speed mode.  Emerging markets are still growing rapidly.  The US recovery is steady.  And much of Europe continues to struggle.  There is however a twist to the story.   Growth almost everywhere is a bit weaker than we forecast in April, and […]

World Faces Weak Economic Recovery

The global recovery continues, but the recovery is weak; indeed a bit weaker than we forecast in April. In the Euro zone, growth is close to zero, reflecting positive but low growth in the core countries, and negative growth in most periphery countries. In the United States, growth is positive, but too low to make a serious […]

Lessons from Latvia

In 2008, Latvia was widely seen as an economic “basket case,” a textbook example of a boom turned to bust. From 2005 to 2007, average annual growth had exceeded 10%, the current account deficit had increased to more than 20% of GDP.  By early 2008 however, the boom had come to an end, and, by the end of […]

Mediocre Growth, High Risks, and the Long Road Ahead

For the past six months, the world economy has been on what is best described as a roller coaster. Last autumn, a simmering European crisis became acute, threatening another Lehman-size event, and the end of the recovery.  Strong policy measures were taken, new governments came to power in Italy and Spain, the European Union adopted […]

The Logic and Fairness of Greece’s Program

To get back to health, Greece needs two things. First, a lower debt burden. Second, improved economic competitiveness. The new program addresses both. Bringing down the debt Some countries have been able to work down heavy public debt burdens. Those that were successful did it through sustained high growth. But in Greece’s case, it had […]

Driving the Global Economy with the Brakes On

After the speech by the IMF’s Managing Director in Berlin yesterday, my main messages on the global outlook will not surprise you. Starting with the bad news–the world recovery, which was weak in the first place, is in danger of stalling. The epicenter of the danger is Europe, but the rest of the world is […]

2011 in Review: Four Hard Truths

What a difference a year makes … We started 2011 in recovery mode, admittedly weak and unbalanced, but nevertheless there was hope. The issues appeared more tractable: how to deal with excessive housing debt in the United States, how to deal with adjustment in countries at the periphery of the Euro area, how to handle […]

Global Growth Hits a Soft Patch

On Friday we were in Sao Paulo, Brazil, to release our update to the IMF’s World Economic Outlook. Despite a mild slowdown, the global economic recovery continues but the road to health will be a long one.  Downside risks, both old and new, are increasing. Our world forecast is 4.3% growth for 2011, and 4.5% […]