Misreading the Global Economy
Over the last three years, the IMF's economic forecasts have repeatedly proved to be overly optimistic. The problem is rooted in a misdiagnosis of the global economy's problems, including the impact of the eurozone crisis and slowing GDP growth in emerging economies.
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PRINCETON – In April 2010, the International Monetary Fund’s World Economic Outlook offered an optimistic assessment of the global economy, describing a multi-speed recovery strong enough to support roughly 4.5% annual GDP growth for the foreseeable future – a higher pace than during the bubble years of 2000-2007. But, since then, the IMF has steadily pared its economic projections. Indeed, this year’s expected GDP growth rate of 3.3% – which was revised downward in the most recent WEO – will probably not be met.