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On Wednesday the IMF released its “World Economic Outlook Update - Global Economic Slump Challenges Policies” report.

Following are some of its main points:

1. The United Kingdom is going to have the worst economic downturn this year with a projected growth figure of -2.80%. The British economy will fare the worst among the advanced economies.

2. The emerging market economies of China and India will have the best growth at 6.7% and 5.1% respectively.

3. The US economy will contract by 1.6%.

4. Europe’s largest economy, Germany, will shrink by 2.5%.

5. The Canadian economy will fare better with a contraction of 1.2%.

6. Overall the advanced economies are projected to contract by 2% while the emerging market economies are projected to grow by 3.3%. Like in the past few years, this implies that the emerging markets are going to drive global growth in 2009.

7. Brazil may grow by 1.8% and the SouthEast Asian economies of Singapore, Malaysia, Thailand, etc. will grow by 2.7%.

Other key bullet points from this report are:

  • The world economy is facing a deep downturn.
  • Financial markets remain under stress.
  • A pernicious feedback loop between the real and financial sectors is taking its toll.
  • Advanced economies are suffering their deepest recession since World War II.
  • Emerging and developing economies are experiencing a serious slowdown.
  • Anemic global growth has reversed the commodity price boom.
  • Inflation pressures are subsiding.
  • Global monetary and fiscal policies are providing substantial support.
  • The uncertainty surrounding the outlook is unusually large.
  • Strong and complementary policy efforts are needed to rekindle activity.”

You can read the full report by clicking here: IMF 2009 World Economic report [pdf].

Source: IMF Global Economic Outlook 2009