IMF in the fog, the world economic outlook is more complicated

The International Monetary Fund (IMF) updated the World Economic Outlook Report on the 7th and released the latest forecast for economic growth in 2010. The most concern is to adjust the world economic growth rate forecast from 4.1% of the previous report to 4.6%, up 0.5 percentage points. At the same time, it is predicted that the US economic growth rate will be 3.3% this year, the Eurozone will be 1%, and Japan will be 2.4%. The forecast results of the US and Japan's economic growth rate will be increased by 0.2 and 0.5 percentage points respectively compared with the previous report, and the Eurozone will remain unchanged. .

At the same time, the IMF warned that although the 2010 growth forecast was raised, in the second half of this year and in 2011, due to the financial turmoil in the Eurozone, the downside risks increased significantly.

Here is a little logic that needs to be straightened out. The IMF publishes a full-year forecast, and all major variables throughout the year should be quantified in the forecast. The economic growth situation in the first half of the year is a foregone conclusion. The most important factor to consider in the July forecast is the situation in the second half of the year. If the IMF judges that the world situation in the second half of the year is “significantly increasing the risk of economic downside”, the forecast for the overall economic growth, which is mainly adjusted for the second half of the year, should be adjusted downwards. The new annual world economic growth forecast data did not fall by 0.5 percentage points. The other single economic entities, the United States and Japan, were respectively raised their growth rates, and the economic growth rate of the EU in the hardest hit areas of the European debt crisis remained unchanged. The warning of “significant increase in economic downside risks” in the second half of the year and the forecast that the annual economic growth rate has been raised may not be self-explanatory.

The IMF's forecast takes into account some preconditions. The report points out that the prerequisite for this new forecast is that reconstruction confidence and stability policies (especially in the euro zone) will be implemented. Are these policies implemented and the risks of economic downturns being curbed?

If this is the case, the forecast results have already taken into account the downside risks, so there should be no warning that the economic downturn will increase significantly. Re-emphasizing the risk alone is equivalent to passing one type of information twice, and each time passing a different message. The information given in the forecast results is that as long as the policy implementation is in place, the economic downside risks will be locked to a certain extent, so the economy will have higher growth. The "warning" transmits the opposite information, and the economic downside risk increases significantly, so the probability of economic growth declines.

Moreover, the “warning” with the added meaning of information after the adjustment is more easily understood as the fact that the implementation of the stabilization policy is not closely related to whether the economy is down. Therefore, the “significant” increase in economic downside risks is the mainstream trend in the second half of the year. If this is the case, the result of raising the global economic forecast for the whole year is not a completely symmetrical result, and the forecast results may seriously mislead the judgment of the global economic trend in the second half of the year.

Is the growth or decline in the second half of the global economy, and the predicted result is a more likely situation, or is the possibility of a “warning” more likely? We seem to have been introduced into the maze, and there is no need to feel it.

The world economy is really complicated. The IMF's predictions have made the world economy more complex.

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