The news conference for the International Monetary Fund’s World Economic Outlook has just finished. The headline is that the world economy is recovering. But in the guts of the report and in the news conference, there are more interesting bits:Global imbalances - the IMF is sounding tough on surplus countries and that will not please Germany or China. Olivier Blanchard, the Fund’s chief economist, said: “It is very hard to see how this [rebalancing] could happen at current exchange rates”, adding that emerging Asia – read China – should allow currency appreciation. Nothing new from the Fund here, but it is more daring than the G20;It is forecasting a jobless recovery and has done interesting cross-country research and historical comparisons, about which I shall post later;Long-term output destruction – from the IMF charts, it looks as though the Fund thinks that the world economy will now grow on a path, 10 per cent lower in perpetuity, than the path it expected in April 2007. The pain in advanced countries and the permanently lost output will be worse than in emerging economies. But no-one is immune;Fiscal consolidation – Mr Blanchard said that new fiscal rules, such as those Britain is proposing, without action to limit retirement benefits and health expenditure, “is a joke”.
But most of the questioning was not on these interesting topics and Fund research, but endless requests from different national journalists wanting a specific IMF quote about their country. Today we had boring questions about Germany, the UK, Turkey, Sri Lanka, Nigeria, Argentina and others. IMF officials pander to these questions, reading out their forecasts with the spurious accuracy of one tenth of a percentage point.
Lots of people love this stuff, when in reality it is just an exercise of the Fund updating its global forecasts in line with the more frequently revised consensus forecasts in financial markets.
And for those that must know what the IMF is forecasting, I’ve stuck in their main table below.