For years now, the release of a new IMF economic forecast has been a cause for embarrassment for the fund’s highly trained staff — and despair for the rest of us. The World Economic Outlook (WEO), published twice yearly, would inevitably show a revised prediction for global economic growth that was weaker than the previous estimate. Bank of Canada Governor Stephen Poloz talked of “serial disappointment” over all the false starts. In the defense of the IMF, who could have predicted that zero interest rates would correspond with a broad decline in business investment? Or foresee acts of economic sabotage by politicians in big economies such as the US (government shutdown and chronic gridlock), China (mismanagement of financial regulation) and the UK (Brexit). The post-crisis era defies prediction; unfortunately, it has yet to deliver a positive surprise.
So perhaps we should quietly celebrate a year in which the global economy didn’t get materially worse? The new WEO, released on Oct. 4 ahead of the institution’s annual meeting in Washington this week, predicts the world’s gross domestic product will expand 3.1 percent in 2016 and 3.4 percent in 2017, little changed from outlook in April.
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