Economic growth should still be at the Rendez-vous next year. By publishing its forecast, yesterday Singapore, a few days before the annual meetings of the international monetary Fund (IMF) and the World Bank, the Chief Economist of the IMF, Raghuram Rajan, proved rather confident for the future. Even if it listed all the potential risks of a breach of this pace of expansion. For 2006, the Fund expects now increased global GDP of 5.1, or 3 tenths of a percentage point more than its forecast of last spring. The next year should be also thriving with a rate of 4.9 (compared to 4.7 previously).
The world knows "the period of expansion (...)". "the strongest since the beginning of the 1970s", said Raghuram Rajan. If he had, a few months in Washington, stressed the prevalence of the expansion, he held yesterday, to put forward the greater autonomy of the major regions of the world over the US economy. Clearly, the slowdown in the United States that should not, in principle, too affect the dynamism of Asia or the consolidation of the recovery in Europe.
Fund has, indeed, revised downward, to 2.9, compared to 3.3, its forecast for growth in the United States in 2007. Mainly because of a settlement since a year of the real estate market. "The question is whether the wage increases can offset the negative effects of this slowdown," questioned Raghuram Rajan, before pointing the dilemma will face the US Federal Reserve. Namely a likely rise in inflationary pressures coupled with a less sustained than economic activity in the past. Indeed, recent indicators show, according to him, because labour costs increased, including a decline in productivity. What should push the US Central Bank to quickly resume its policy of rise in interest rates.
Appeal to the ECB
Nothing of the sort for the euro zone, where growth has been revised slightly upward. The Bretton Woods institution has identified its forecast for the France to 2.4 this year, a figure in line with the assumption of the Government, and 2.3 next year. In Germany, after 2 expected in 2006, 2007 should devote a net slowing with only 1.3, in view of the programmed increase of VAT. The improvement did not prevent the IMF to warn the European Central Bank (ECB) against any precipitation in its policy of raising the rent money. "For the moment, the inflationary pressures remain contained globally and, in view of the risks weighing on activity," the ECB can afford to delay, noted the multilateral institution.
Economic dynamism should persist both in Asia and in Latin America and even in Africa, the custodian of international financial stability was nevertheless concern the persistence of imbalances between, on the one hand, the trade deficit the United States and, on the other, surpluses in Asia and oil-producing countries. The Chief Economist of the Fund, again, argued yesterday, for greater flexibility of Asian exchange rates, in a barely veiled allusion to the revaluation of the Chinese yuan. Another risk: the situation in the Middle East "could fuel a new rise in the price" for oil, which is expected to continue in the coming months on $ 75 per barrel, according to him.
But the Chief Economist of the IMF especially criticised the failure of the negotiations, in July, at the World Trade Organization, to complete Doha round. The most serious problem in his eyes.
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