The
international Monetary Fund is holding its annual meeting in Peru this week,
and prior to its commencement it has both downgraded its estimates for global
growth and warned of what it sees as two significant risks to the world
economy.
These are
the possibility of a further slowdown in China, and the likely devastating
effects of plunging commodity prices in emerging markets.
The IMF’s
downgrade of growth on a worldwide basis is all the more concerning for the
fact that the latest warning represents a continuation of a falling trend –
this estimate is below both its earlier growth forecasts this year, in April
and July.
The Fund is
not slow to criticise the US Federal Reserve, for failing to communicate
effectively in its last monetary policy meeting, in September, when it failed
to raise rates despite comments prior to it that indicated that a first increase
was possible on that occasion. According to the IMF, greater transparency by
the FED would ease possible disruptions in emerging markets.
The
conclusion in the IMF World Economic Outlook publication says that the “… distribution
of risks to global growth remains tilted to the downside”.
Draghi speech monetary policy
anti-climax
Last
evening, the President of the ECB, Mario Draghi, was scheduled to make a speech
at the European Central Bank in Frankfurt, on the occasion of the inauguration
of an art installation at the central bank. This was picked up by the good
people who compile the Forex economic calendar, and included in it. As a result
some expectation was raised that he might provide insights into possible
developments in the ECB, maybe even with regard to the burning question of
Quantitative Easing (QE).
In the
event, while certainly very gratifying for the artistic community in the Eurozone,
the speech was a flat-out anti-climax as far as economic matters were concerned.
Readers will
be pleased to know that, according to President Draghi, the ECB owns 320 works
of art. He is of the opinion that “Art is part of European history, of European
heritage at its best. It also reminds us that values are not only monetary”
“Art unites”
he said, “but to engage in art also means to accept different perspectives, and
to embrace the possibility that different, sometimes even incoherent
perspectives exist”.
Hmmmm.
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