São Paulo – The International Monetary Fund (IMF) disclosed on Wednesday (23), in Washington, the update of its World Economic Outlook (WEO), reducing the forecasted growth of the global economy and also that of Brazil and of the Euro Zone for 2013. The Fund recognized that there has been improvement in economic indices after the third quarter of 2012, but it forecasts slow expansion throughout 2013.
According to fund estimates, disclosed on Thursday, the world’s Gross Domestic Product (GDP) should grow 3.5% in 2013 and 4.1% in 2014, both figures represent a 0.1% drop over the October 2012 forecast. The projections show that the world GDP expanded 3.2% in 2012.
The IMF report shows that the main sources for improvement of economic conditions half way through last year were the markets in emerging countries, which grew more than expected, the growth of the North American economy, of capital markets and the reduction of the cost of loans to the countries in the “periphery” of the euro area (as the continent’s nations at the heart of the crisis, Greece, Ireland, Italy, Spain and Portugal, are known). The document also shows that the flow of capitals in developing nations has remained high.
If there are signs of recovery, there are also signs that it will be slow. To the IMF, the countries in the periphery of the euro zone should have presented, in the second half of 2012, a significant improvement in economic conditions, which did not happen. The results of these countries in bad conditions threaten those that are in better situation. The IMF forecasts show that the GDP of the euro zone will retract 0.2% this year, as against a forecasted growth of 0.1% in October. For 2014, it should grow 1%, 0.1% less than announced previously.
Japan returned to recession late last year. In 2012, the growth should be 1.2% and, in 2014, 0.7%. The United States should grow 2% in 2013 and 3% in 2014. In the two following years, the growth should be 0.1% lower than forecasted last year.
The economic councillor at the IMF, Olivier Blanchard, said that financial conditions improved in recent months and observed that there was expansion in negotiations to implement measures necessary to make the countries grow. However, he stated he is concerned with the situation of people and that “something has to happen” to rekindle growth.
Emerging nations grow less
The GDP of developing nations should expand less than forecasted before. Brazil, for example, had a reduction for projections in 2012, 2013 and 2014. For 2012, the new projection of the fund forecasts expansion of 1% for 2012 (in October, the forecast was to grow 1.5%), 3.5% in 2013 (against 3.9%) and 4% in 2014 (in October the estimate was 4.2%).
The other countries of the BRICS, Russia, India, China and South Africa should also grow less than forecasted this year. To the IMF, these countries now have a greater chance to heat up their economy than they did in the early crisis. However, Blanchard, stated that “growth is not projected to rebound to the high rates recorded in 2010–11.”.
The fund also forecasted down the forecasted growth of the countries of the Middle East and North Africa this year. Current expectations are for growth, on average, to reach 3.4% this year. The forecast disclosed in October showed growth of 3.6% for 2013. For 2014, in turn, the forecast is for the Arab nations to grow 3.8% has been maintained.
In the press release disclosed on Wednesday, the Fund recommends care to the Arab nations. “In the Middle East and North Africa region, many countries will need to maintain macroeconomic stability under difficult internal and external conditions,” warns the report.
*Translated by Mark Ament
