US Global Investors Cl A Pfd. (GROW)

[Pro-Life]

November 6, 2008
IMF Gets Bearish on Global Growth

http://www.usfunds.com/franktalk/

It’s official from the IMF: October was a rough month.

So rough, in fact, that the agency has trimmed its world growth forecast by 25 percent from just a month ago.

The International Monetary Fund is now forecasting a 2.2 percent global growth rate for 2009, down from 3.75 percent in 2008. In October, its prediction was around 3 percent.

Emerging markets are expected to see the strongest contractions—about 1 percent on average. But even so, most should see growth rates around 5 percent or even higher.

Commodity exporters like Brazil were marked down the most, while China suffered less of a revision because of improved trade terms and easing macroeconomic policy.

That’s the bad news. The good news is the forecast stresses the importance of more macro moves.

Overview of the World Economic Outlook Projections


World Output Year Over Year Projections
2008 2009
United States 1.4 -0.7
Euro Area 1.2 -0.5
Japan 0.5 -0.2
Russia 6.8 3.5
China 9.7 8.5
India 7.8 6.3
Middle East 6.1 5.3
Brazil 5.2 3.0

“Monetary policy may not be enough because monetary easing may be less effective in the face of difficult financial conditions and deleveraging,” the IMF says. “Fiscal stimulus can be effective if it is well targeted, supported by accommodative monetary policy, and implemented in countries that have fiscal space.”