Salient to Investors:

The IMF said:

  • The world economy will grow 3.5 percent in  2013 and 4.1 percent in 2014, versus 3.2 percent in 2012.
  • The euro region will shrink 0.2 percent in 2013, led by Spain and slowing growth in Germany, and grow 1 percent in 2014.
  • The euro region poses a large risk to the rest of the world.
  • The US will grow 2 percent in 2013 and 3 percent in 2014.
  • Japan will grow 1.2 percent in 2013 and 0.7 percent in 2014.
  • Commodity prices will fall, oil will fall 5.1 percent because there’s less space for such action now.
  • Brazil will grow 3.5 percent in 2013 and 4 percent in 2014.
  • India will grow 5.9 percent in 2013 and 6.4 percent in 2014.
  • China will grow 8.2 percent in 2013 and 8.5 percent in 2014.
  • Germany will grow 0.6 percent in 2013 and 1.4 percent in 2014.
  • Spain will contract 1.5 percent this year and 0.8 percent in 2014.
  • Italy will contract 1 percent in 2013 and grow 0.5 percent in 2014.

Olivier Blanchard at the IMF said:

  • It is not clear Europe is on the mend as something has to happen to start growth.
  • Emerging nations’ growth rates seen before the crisis are long gone, but things in general are fine.
  • The global growth numbers are insufficient to dent the unemployment rate in advanced economies, and financial markets are ahead of the real economy.
  • Fiscal expansion in Japan will help short-term growth but increasing the fiscal deficit short-term is very risky given starting at such a level of debt and without a medium term credible fiscal consolidation plan.
  • Concerns about currency wars are very much overblown, as countries have to take the right measures to get their own economies back to health.

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