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Established in 2006 as a Community of Reality

Welcome to the Neno's Place!

Neno's Place Established in 2006 as a Community of Reality


Neno

I can be reached by phone or text 8am-7pm cst 972-768-9772 or, once joining the board I can be reached by a (PM) Private Message.

Established in 2006 as a Community of Reality

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Established in 2006 as a Community of Reality

Many Topics Including The Oldest Dinar Community. Copyright © 2006-2020


    The fragile economic recovery

    Rocky
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    • Post n°1

    The fragile economic recovery Empty The fragile economic recovery

    Post by Rocky Mon 07 May 2018, 3:53 am

    The fragile economic recovery

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    The global economy is undergoing a period of strong economic growth, albeit at a faster pace than 2003-2007, but from a growth perspective in that period, we should perhaps be grateful for this blessing .
    Growth rates in 2017, as projected by the International Monetary Fund for the years 2018 and 2019, are projected to be higher than any other year since the crisis, with the exception of years of post-crisis recovery in 2010 and 2011, and we are experiencing times of fragile recovery .
    In its latest report, the IMF raised its forecast for global economic growth this year and the following year by 0.2 percentage points above its previous forecast in October 2017. That improvement extended developed economies by 0.5 and 01.4 percentage points in 2018 and 2019, respectively. Britain is the only member of the Group of Seven (G7) countries that have not been adjusted for the better, and this is the early price for their exit from the EU .
    Taking into account protectionist voices in the US, the most significant adjustment may be the improvement in the expected growth in global trade, which the IMF expects to grow faster now by 1.1 percentage points in 2018 and 0.8 percentage points in 2019 .
    There are two main reasons for the strength of the global economy and this growing optimism about short-term expectations, both due to the fact that monetary policy remains supportive of that power, while the world has avoided major economic shocks since the collapse of commodity prices in 2014 and 2015 .
    Markets expect US interest rates to rise more sharply than in October. However, monetary policy will not be tightened in accordance with historical standards, as the expected rate is below 3% even in early 2021. This optimism is due in large part to the fact that inflation was marginal, mainly wage inflation, despite low unemployment .
    In addition to monetary policy, the substantial financial consolidation of the economic cycle resulting from unfunded US tax cuts should be added. The Congressional Budget Office expects an average federal deficit of just under 5% of GDP between 2019 and 2027 .
    This combination into a full employment economy brings us back to the late 1960s and early 1970s. That period has ended very badly. But the view of the International Monetary Fund is not too catastrophic, stating that the US fiscal policy has borrowed growth from the future .
    What is the risk of a good outlook for the future? In the short term, the IMF says the risks are balanced. On the positive side, confidence may lead to a larger-than-expected increase in investment and consumption. A stronger investment may result in productivity growth and lower inflation than expected .
    On the downside, the ambiguity surrounding the policy environment and the attendant market disruptions can lead to a significant reduction in confidence and hence to weak demand. One of the most fragile places in the euro area, where Gavin Davis said growth was unexpectedly falling .
    In the long run, however, the risk appears to be likely to move towards the downside. It is true that we may be at the beginning of a period of sustained and rapid growth driven by the late rise in productivity growth and convergence between developed and emerging countries, but negative risks are stronger .
    The debt-to-GDP ratio is as high today as it was a decade ago, despite the change in structure: towards government and nonfinancial corporations, and away from domestic and financial sectors. Important asset prices are also high .
     
    The International Monetary Fund (IMF) notes that "credit risk may be contained at a time when global growth is experiencing strong momentum and low borrowing rates." However, if inflation stuns the world, monetary policy tightening increases more than expected, Bonds, debt problems will reappear and perhaps disastrously .
     
    If this happens, the range of response available from central banks will be limited. The Fund also notes that the rapid growth of "encrypted assets" and violations of cybersecurity may prove to be devastating .
     
    Moreover, there are deep world political tensions. The funny intellectual framework of US trade policy is being presented in the Fund's outlook, and away from deflation, the US current account deficit will expand as a result of fiscal consolidation. But this will not stop US President Donald Trump from blaming the foreigners .
     
    As the IMF's economic adviser, Maurice Obstfeld, puts it, "The rules-based multilateral trading system needs to be strengthened, and instead it is in danger of being torn apart."The IMF has been a product of more prudent times, and it is right to be reminded of it .
     
    At a time when an emerging superpower challenges an existing force, and when the latter turns against the world order that created it, it is ridiculous to feel complacent .
     
    We have already experienced a crisis in the global system for a decade, but policymakers have prevented it from turning into a systemic crisis. Now, as we live in a period of cyclical recovery, we face a system crisis, but our time is an era of economic and political weakness, while the recovery is real, but unfortunately it is fragile .

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