IMF Lowers Global Growth Projection
For 2015, Global GDP Growth Has been revised down to 3.5% (from 3.8%)
“At the country level, the cross currents make for a complicated picture,” says Olivier Blanchard, IMF Economic Counsellor and Director of Research. “It means good news for oil importers, bad news for oil exporters. Good news for commodity importers, bad news for exporters. Continuing struggles for the countries which show scars of the crisis, and not so for others. Good news for countries more linked to the euro and the yen, bad news for those more linked to the dollar.”
In a nutshell:
This should favour US, Japan and Euro are economies.
Likely not good for Canada (see Jan.14 blog)
Definitely not good for Russia.
Interestingly:
the growth forecast for China, where investment growth has slowed and is expected to moderate further, has been marked down to below 7 percent. The authorities are now expected to put greater weight on reducing vulnerabilities from recent rapid credit and investment growth and hence the forecast assumes less of a policy response to the underlying moderation. This lower growth, however, is affecting the rest of Asia.
And:
Risks to recovery
The distribution of risks to global growth is more balanced than in October, notes the WEO Update. On the upside, lower oil prices could provide a greater boost than assumed. Other risks that could adversely affect the outlook involve the possible shifts in sentiment and volatility in global financial markets, especially in emerging market economies. The exposure to these risks, however, has shifted among emerging market economies with the sharp fall in oil prices. It has risen in oil exporters, where external and balance sheet vulnerabilities have increased, while it has declined in oil importers, for whom the windfall has provided increased buffers.
For 2015, my 60-40 and 40-60 models have been adjusted: adding Euro area and Japanese equities and lowering Canadian Small Cap and Emerging Markets exposure.
No comments:
Post a Comment