Skip to main content

Cookies and Privacy

We use cookies to improve your experience on our website. To find out more, read our updated Cookie policy, Privacy policy and Terms & Conditions

IMF World Bank Meetings Zach Gibson/Stringer

A False Spring at the Spring Meetings?

The IMF is optimistic about the world economy's growth prospects over the next two years. But the Fund is taking too much comfort in the stabilization of economic conditions: beneath the headline numbers, there is little evidence that underlying problems have been resolved.

WASHINGTON, DC – Every spring, international bureaucrats flock to Washington, DC, as reliably as swallows to Capistrano, for the annual meetings of the International Monetary Fund and the World Bank, where they exchange information about their local economies and policy prospects. Because these officials attend multiple events over the course of the week, an echo chamber develops, from which a general perception of the state of the global economy emerges. Policymaking around the world is then influenced by that perception.

This time round, the sense was positive. According to IMF staff, as reported in their World Economic Outlook, real GDP should expand by about 2% in advanced economies this year and next. This will pull the unemployment rate below 6%, not much different from its level before the 2008 financial crisis. Deflation or unwelcome disinflation is now seen only in the rearview mirror, as consumer price inflation settles around 2%, the goal of most major central banks.

But, as any resident of New England knows, April showers do not always bring May flowers; sometimes they bring only more and colder showers. Not to rain on officials’ parade, but we fear that they are taking too much comfort in the stabilization of economic conditions. Beneath the headline numbers, there is little evidence that underlying problems have been resolved.

We hope you're enjoying Project Syndicate.

To continue reading, subscribe now.

Subscribe

Get unlimited access to PS premium content, including in-depth commentaries, book reviews, exclusive interviews, On Point, the Big Picture, the PS Archive, and our annual year-ahead magazine.

https://prosyn.org/zzGM2Dk;
  1. elerian122_Peter MacdiarmidGetty Images for Somerset House_bigdatascreentechman Peter Macdiarmid/Getty Images for Somerset House

    Adapting to a Fast-Forward World

    Mohamed A. El-Erian

    The world is going through a period of accelerating change, as four secular developments illustrate. Firms and governments must make timely adjustments, not only to their business models and operational approaches, but also to both their tactical and strategic mindsets.

    9
  2. roubini137_Mikhail SvetlovGetty Images_xi putin Mikhail Svetlov/Getty Images

    The White Swans of 2020

    Nouriel Roubini

    Financial markets remain blissfully in denial of the many predictable global crises that could come to a head this year, particularly in the months before the US presidential election. In addition to the increasingly obvious risks associated with climate change, at least four countries want to destabilize the US from within.

    9

Edit Newsletter Preferences