What was a surprise in the IMF’s updated growth estimates was the correction made to the growth forecast for Spain this year (-0.1 pp to 2.4%) given “the impact of greater political uncertainty on confidence and demand.”
Greece enters a new year that could prove to be a watershed in its long and meandering traipse through three successive bailouts and faltering efforts to overcome the chronic weaknesses that contributed to one of the most damaging economic crises the developed world has seen.
In the IMF blog there is a brief view of how well the year has gone and the promises for the future which we can extract from this good performance. For me it’s proof of an excess confidence which in the past was a trap into which the markets systematically fell. But the IMF has to accept the rationalistic view that the markets don’t get it wrong, while I maintain they quite often make mistakes.
Before the crisis, Spain’s financial system passed the International Monetary Fund (IMF) stress tests which included a 30% drop in property prices, according to Pedro Pablo Villasante, former managing director of Supervision at the Bank of Spain between 2000 and 2006.
The IMF has just upped its forecast for global growth by one-tenth of a percentage point to 3.6% and 3.7% respectively for this year and the next. The message from the supranational organisation is relatively positive: over 75% of the world is seeing an acceleration in its rate of growth.
Intermoney | This week we will see the publication of the first chapters of the IMF’s six-monthly report on Global Economic Perspectives, which should be more favourable than on previous occasions. The synchronisation and the strength of global growth is a reality and the data over the coming months won’t call this into question.
Yiannis Mouzakis via Macropolis | Greece’s economic collapse in 2010-2013 has become legendary. The country had already been hit hard by the global financial crisis in 2009, when it posted a sharp GDP drop of -4.3 percent. This set the stage for what would become the deepest economic contraction of a developed country in history. But would the implementation of structural reforms have helped alleviate this situation?
The Spanish economy grew at a rate of 3.2% in 2016, although signs of a slowdown are beginning to appear. Almost all the external factors which had boosted GDP growth latterly (the so-called tail winds) may disappear over this year.
Yiannis Mouzakis via Macropolis | Often, the decisions taken by the eurozone that shaped the Greek crisis at pivotal moments and sealed the country’s fate were defined by the limitations that the decision makers were facing and not the approach that would have produced the optimal result.
The January update of the IMF’s “World Economic Outlook”, published in October, confirms that Spain will recover this year all the GDP growth lost during the economic crisis, exceeding in 2017 for the first time the volume of growth in 2008.