Features

Today’s game changer: IMF cuts economic forecast

The International Monetary Fund has cut its global economic forecasts for 2015 and 2016. Mischa Frankl-Duval looks at what that means.

150120-draghi

The ECB's Mario Draghi: despite the prospect of quantitative easing, the IMF has given the global economy the thumbs down.

The world's just a little gloomier than expected.

So says the International Monetary Fund ( IMF), which has cut global economic forecasts for 2015 and 2016 by 0.3%. The IMF now expects growth to be 3.5% this year, and 3.8% in 2016.

The IMF's report attributed the projection to "a reassessment of prospects in China, Russia, the euro area, and Japan as well as weaker activity in some major oil exporters", going on to note that "the United States is the only major economy for which growth projections have been raised".

"The downgrade to the forecasts comes despite one major boost for the global economy," said the BBC, "the sharp fall in oil prices, which is positive for most countries."

The IMF's growth forecast for the UK remained unchanged at 2.7% in 2015.

What does this mean?

repeatedly advocated quantitative easing (QE)

"Buying sovereign assets, in proportion to ECB capital key, would reduce government bond yields, induce higher equity and corporate bond values" said an IMF report in July 2014 ultimately raising demand and inflation expectations across the euro area."

Yet despite the potential benefits of QE, the IMF still gives global growth the thumbs down.

What next?

said that the chances of a QE announcement this week

All eyes on Draghi.

Recommended

The charts that matter: bond yields turn back up and a new bitcoin record
Global Economy

The charts that matter: bond yields turn back up and a new bitcoin record

Bitcoin hit a new all-time high, while government bond yields turned back up. Here’s how that has affected the charts that matter most to the global e…
23 Oct 2021
Green finance is set to be the most powerful financial repression tool yet
Bonds

Green finance is set to be the most powerful financial repression tool yet

The government has launched its “green savings bond” that offers investors just 0.65%. But that pitiful return is in many ways the point of “green” fi…
22 Oct 2021
Equities are not a good inflation hedge
Economy

Equities are not a good inflation hedge

Institutional investors are definitely now worried about inflation. But they're not yet worried enough to flee to cash, says John Stepek
22 Oct 2021
Why fed-up workers are quitting their jobs
Economy

Why fed-up workers are quitting their jobs

Workers are leaving their jobs at an astonishing rate, especially in the US, leading to a shortage of workers. What will that mean for our economies? …
22 Oct 2021

Most Popular

How to invest as we move to a hydrogen economy
Energy

How to invest as we move to a hydrogen economy

The government has started to roll out its plans for switching us over from fossil fuels to hydrogen and renewable energy. Should investors buy in? St…
8 Oct 2021
Properties for sale for around £1m
Houses for sale

Properties for sale for around £1m

From a stone-built farmhouse in the Snowdonia National Park, to a Victorian terraced house close to London’s Regent’s Canal, eight of the best propert…
15 Oct 2021
How to invest in SMRs – the future of green energy
Energy

How to invest in SMRs – the future of green energy

The UK’s electricity supply needs to be more robust for days when the wind doesn’t blow. We need nuclear power, says Dominic Frisby. And the future of…
6 Oct 2021