The International Monetary Fund (IMF) has thrown a glass of cold water on optimistic views about global economic growth. The IMF, led by Christine Lagarde, lowered its April growth forecasts by two tenths of a point, predicting increases of 3.1% for this year and 3.8% for 2014. Bernanke's decision to stop pumping money into the US economy will have a small effect on his nation's slow recovery, but the IMF's real worry is that new risks are piling up on top of the old ones.
For example, emerging economies like China, India and Brazil are in the midst of a long period of slow growth. After the latest brush with the European Commission, Lagarde has no qualms about telling the EU that in additon to being the core of the rela problem, it should change its monetary policy, becuase European leaders are showing too much complacency with the way events are panning out.
Wolfgang Schäuble, Germany's Finance Minister, assured that Spain is starting to see the light at the end of the tunnel. This opinion runs counter to the IMF's prediction that the Spanish economy will stall in 2014 (in a previous report it forecasted 0.7% GDP) and that growth would not begin until late 2014.
This is a major blow to the government's announcement that we are near the end of the crisis. Prudence is necessary, becuase with a situation this fragil, any small crisis could wreak havoc on the stock market. Good summer numbers do not equal new trends, and the executive should not rest on its laurels, but continue to push 2013 reforms until the problems with our economy are fixed.
