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Posted by: Michael Mandel on April 09
The International Monetary Fund has come out with its latest set of forecasts of the world economy. The report says at one point:
The IMF staff now sees a 25 percent chance that global growth will drop to 3 percent or less in 2008 and 2009—equivalent to a global recession.
Why is 3% growth equivalent to a ‘global recession’? In the U.S., a recession means, basically, that economic activity is shrinking. There’s something puzzling about calling 3% world economic growth a recession.
I think it means that it would be so politically disastrous for China to drop below 5% or so growth for a full year that the economists at the IMF don’t want to even think about it.
By this definition, the world economy has been in recession 1980-83, 1990-93, 1998, and 2001-2002. In other words, 11 out of the last 28 years. There are no negative years of world growth.
Here are the IMF’s latest world growth numbers, and forecasts out to 2013.
Michael Mandel, BW's award-winning chief economist, provides his unique perspective on the hot economic issues of the day. From globalization to the future of work to the ups and downs of the financial markets, Mandel-named 2006 economic journalist of the year by the World Leadership Forum-offers cutting edge analysis and commentary.