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IMF ”EUが原因でBRICは景気後退する”

IMF Cuts Global Outlook As EU Ensnares Emerging Economies

By Sandrine Rastello - Jul 16, 2012 1:27 PM CT

The International Monetary Fund cut its 2013 global growth forecast as Europe’s debt crisis prolongs Spain’s recession and slows expansions in emerging markets from China to India.

Growth worldwide will be 3.9 percent next year, less than the 4.1 percent estimate in April, the fund predicted in an update of its World Economic Outlook. Spain’s economy will contract 0.6 percent instead of a prior forecast for 0.1 percent growth, and India’s projection for next year was reduced 0.7 percentage point to a 6.5 percent expansion, it said.

Central bankers from London to Seoul have lowered borrowing costs or increased bond buying in recent weeks in a round of international stimulus echoing the response to the 2007-08 global financial crisis. The fund said a U.S. rebound is moderating, the outlook is deteriorating for developing economies and global growth could suffer further if European policy makers put off measures agreed at a June summit to arrest the region’s instability.

“In the past three months, the global recovery, which was not strong to start with, has shown signs of further weakness,” the Washington-based IMF said in the report. “Downside risks continue to loom large, importantly reflecting risks of delayed or insufficient policy action.”

2012 Slowdown

For 2012, the global forecast was little changed at 3.5 percent, the IMF said, as the Germany and Japan’s economies expand faster than projected three months ago.

The U.S. will grow 2 percent this year and 2.3 percent in 2013, as forecast July 3. Too much fiscal tightening in the world’s largest economy would pose a risk to global growth, according to the fund, especially if policy makers fail to reach a consensus on extending some temporary tax cuts and reversing automatic spending reductions.

A report from the U.S. Commerce Department today showed retail sales unexpectedly declined for a third straight month in June as limited employment gains took a toll on the biggest part of the economy.

The 0.5 percent drop followed a 0.2 percent decrease in May. The decline exceeded the most pessimistic forecast in a Bloomberg News survey in which the median projection called for a 0.2 percent rise. Purchases last fell for three or more months in July through December 2008.

The Standard & Poor’s 500 Index fell less than 0.1 percent to 1,356.25 at 2:23 p.m. in New York after declining as much as 0.6 percent.

Policy Action

The IMF said its latest estimates hinge on an assumption “that there will be sufficient policy action to allow financial conditions in the euro-area periphery to ease gradually and that recent policy easing in emerging market economies will gain traction.”

The fund, which co-financed bailouts for Ireland and Greece, lowered its growth forecast for the euro region next year to 0.7 percent, from 0.9 percent in April, and left a forecast for a 0.3 percent contraction this year unchanged.

Italy and Spain, which has requested a bailout from euro countries to help shore up its banks, have taken important steps from fiscal consolidation to reforms of their economies, IMF chief economist Olivier Blanchard said at a press conference today in Washington.

‘Reasonable Rates’

“They can only succeed if they can finance themselves at reasonable rates,” Blanchard said. “So long as these governments are committed to reforms, other euro members have to be willing to help so as to make the adjustment feasible.”

Jose Vinals, who heads the fund’s capital markets department, said some action should be taken to stabilize funding conditions in the euro region. That could be done by restarting the European Central Bank’s bond-buying program, he said at the press conference.
Carlo Cottarelli, his counterpart at the fiscal department, estimated that spreads on Italian and Spanish bonds are at least 200 basis points higher than the level their economic fundamentals call for. Other potential supportive measures include issuing common bonds, he said.

The IMF, in a separate report released today, said risks to the global financial system have increased since April.

“Funding conditions for many peripheral banks and firms have deteriorated” even as the ECB provided lenders with ample liquidity, the IMF wrote in an update of its Global Financial Stability Report. “Interbank conditions remain strained, with very limited activity in unsecured term markets, and liquidity hoarding by core euro-area banks.”

Easing Room

The IMF said “there is room for monetary policy in the euro area to ease further” and repeated its call for policy makers to move toward a banking and fiscal union. Besides restarting the bond-purchasing program, the Frankfurt-based ECB could offer liquidity to banks with lower collateral requirements or start a quantitative easing program with asset purchases, the IMF said.

The U.K. economy will advance 1.4 percent next year, less than the 2 percent growth seen in April, the fund predicted in the economic outlook report.

In many emerging markets, there is also scope for monetary easing and “policy makers should stand ready to adjust policies, given spillovers from weaker advanced economy prospects and slowing export growth and volatile capital flows,” according to the report.

India, China

The IMF reduced its forecasts for India and China this year as well as for emerging markets as a group, where slower growth reflects a weaker international environment, lower domestic demand and increased risk aversion among investors.

China’s gross domestic product is forecast to expand 8 percent in 2012, compared with 8.2 percent seen in April, and accelerate to 8.5 percent growth in 2013, compared with 8.8 percent predicted three months ago. In the medium term, the IMF sees “tail risks of a hard landing” if overcapacity in some industries led to a sharper decline in investment spending in the world’s second-biggest economy.

While Asia appears more shielded, markets in the region as well as global commodity prices are feeling the pinch from slower Chinese growth, the IMF said. Japan’s economy is forecast to expand 1.5 percent in 2013, less than the 1.7 percent growth estimated in April, the fund said.

Brazil Outlook

India is forecast to grow 6.1 percent this year, from 6.8 percent previously forecast. Brazil will expand 2.5 percent, 0.6 percentage point less than in April, and 4.6 percent in 2013, compared with 4.1 percent, the fund said.

“Downside risks to growth in emerging-market and developing economies seem primarily related to external factors in the near term,” the IMF said.

While policy makers in emerging markets tightened policies to avoid over overheating, they have now started to reverse the move, with Brazil and Korea both cutting rates last week.

“The deliberate slowing has come to an end,” Thomas Helbling, a division chief in the research department, said in Washington today. “In our forecast we think that easing will gain traction.”

To contact the reporter on this story: Sandrine Rastello in Washington at



Author: Nobuyoshi Ozaki

A long forty six years have passed since I stepped on to American soil. I have had various odd jobs in the past until I recently retired. Examples include working with Steven Spielberg as assistant director in a film called "1941." I was supervisor and later became Public Relation representative for Toyota Group - USA. My last occupation was a Senior Research analyst working in Silicone Valley for a major news paper from Tokyo, Japan. My spouse, Christine is a flight attendant, traveling often to the Middle East and Africa. We have spent three quarters of our life together as world adventurers. This photo was taken in Argentina. We now live in swampy Louisiana.