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Global Outlook: Blue
Skies or Clouds
Ahead?
By David Robinson
IMF
Presentation for the event:
XXXI Meeting of the Latin American Network of
Central Banks and Finance Ministries
April 22-23, 2010
Washington, DC
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Global Outlook: Blue Skies or Clouds
Ahead?
David Robinson
International Monetary Fund
April 22nd, 2010
Views expressed are those of the speaker alone and should not be
reported as representing the official position of the International Monetary Fund.
Outline of Presentation
„
The global outlook—a multi speed recovery,
but not business as usual;
„
The United States—a stronger than expected
rebound, but weaker than past recoveries;
„
A key challenge: rebalancing demand.
1
Where are we now?
WEO Real GDP Growth Projections
(percent change from a year earlier)
U.S.
Euro
Japan
EMs
EAsia
LA
World
2010 (Current)
2010 (Jan. 10)
3.1
2.7
1.0
1.0
1.9
1.7
6.3
6.0
8.7
8.4
4.0
3.7
4.2
3.9
2011 (Current)
2011 (Jan. 10)
2.6
2.4
1.5
1.6
2.0
2.2
6.4
6.3
8.6
8.4
4.0
3.8
4.3
4.3
Source: IMF, World Economic Outlook.
2
A multi speed recovery
3
Surging capital flows to emerging
markets
4
Unusually strong commodity
price rebound
„
„
„
Commodity prices have
picked up faster than in
previous recoveries
Reflecting strong
growth in Emerging
Asia…
…modest stock levels,
low interest rates, and
dollar depreciation
5
Growth rates: back to business as
usual?
6
No: a look at output levels
Real GDP
(indexes, 2000 = 100)
7
…creditless recoveries
8
…and world war-like debt
without a world war
9
Balance of risks to the downside
10
US recovery leads industrial
countries…
11
…but so far driven by stimulus
and inventories
12
Two risks—housing…
„
„
„
Housing starts and
prices have stabilized;
But over 20 percent of
mortgages underwater,
foreclosures and
delinquencies continue
to climb;
And commercial real
estate continues to
contract sharply
13
…and unemployment
„
„
„
Unemployment has
begun to stabilize;
But long term
unemployment and
labor underutilization
are historically high;
Raising risks of a slow
jobs recovery.
Unemployment
(percent of labor force)
20
20
15
15
Broad Labor
Underutilization
Rate (U-6)
10
5
10
Unemployment
Rate
5
Long-Term
Unemployment
Rate
0
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
14
Putting it all together
15
Rebalancing global demand (1)
16
Rebalancing global demand (2)
17
Conclusions
„
„
„
Recovery to continue, with emerging markets
remaining in the lead;
Global rebalancing remains a key challenge:
from public to private demand, and from
deficit to surplus countries.
Credible medium term fiscal strategies are
urgently needed in many countries.
18