Global growth still holding up but European risks rising
Simon Ward
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Key themes in my outlook for 2008 were 1) global economic resilience despite the credit crisis, 2)
These themes receive support from the IMF’s latest global economic forecasts, published last week.
The IMF now believes world GDP will rise by 4.1% in 2008, up from 3.7% in April. 4.1% is a respectable number by historical standards – growth averaged just 2.9% over 1990-99.
Among the major economies, the
Meanwhile, average 2008 consumer price inflation has been revised up by 0.8% and 1.7% in advanced and emerging economies, to 3.4% and 9.1% respectively.
Looking forward, relatively loose monetary policies and solid emerging world momentum should continue to limit global economic weakness. Downside risks stem less from the credit crisis than an inflation-induced squeeze on real incomes.
A key issue is whether US and emerging world resilience is offset by gathering weakness in
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