{
  "title": "A Spanner in the Works: An Update to the World Economic Outlook",
  "publication": "IMF Blog, July 19, 2016",
  "sourceUrl": "https://www.imf.org/en/blogs/articles/2016/07/19/a-spanner-in-the-works-an-update-to-the-world-economic-outlook",
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  "summary": "Event dates and authorship:",
  "sections": [
    {
      "heading": "Brexit, immediate effects, and revised global projections",
      "content": "- Event dates and authorship:\n  - United Kingdom vote to leave the European Union on June 23, 2016.\n  - Analysis by Maurice Obstfeld, July 19, 2016.\n  - Reference date: as of June 22 we were prepared to upgrade 2016-17 projections.\n- Revised global growth projections:\n  - April Outlook: 3.2 percent global output growth in 2016 and 3.5 percent in 2017.\n  - Update (incorporating Brexit and other developments): reduced both projections by 0.1 percentage point, to 3.1 and 3.4 percent, respectively.\n- Geographic concentration of the slowdown:\n  - The new baseline concentrates the growth slowdown through 2017 in the advanced countries.\n  - Outside advanced economies, gains in the emerging group are matched by losses in low-income economies.\n  - Sub-Saharan Africa: growth reduction driven by difficult macroeconomic situations in Nigeria and South Africa; implication that in 2016 regional output growth will fall short of population growth, implying declining per capita incomes.\n- Scope of Brexit’s direct effects:\n  - Direct effects specifically due to Brexit are greatest in Europe, especially the United Kingdom.\n  - Projections for other areas are little changed by Brexit."
    },
    {
      "heading": "Alternative Brexit scenarios and financial-market considerations",
      "content": "- Model-based illustrative scenarios presented alongside the baseline:\n  - One scenario moderately worse than the baseline.\n  - One scenario much worse than the baseline.\n- Drivers required for alternative scenarios to materialize:\n  - More disruptive international-trade effects of Brexit than currently anticipated.\n  - Greater effects of uncertainty on economic activity than yet evident, triggering severely negative financial feedback loops and widespread banking-sector stress in the euro area.\n- Why the baseline retains more weight:\n  - Financial markets have proven resilient in the weeks after the referendum, repricing in an orderly fashion.\n  - Benign market outcome attributed importantly to the perception—and reality—of major central banks’ readiness to provide liquidity to markets.\n  - Persisting vulnerabilities, especially in some of Europe’s banks, nonetheless remain."
    },
    {
      "heading": "Other continuing downside risks to the outlook",
      "content": "- Ongoing structural and cyclical vulnerabilities:\n  - Strains from refugees and other displaced people, with political and economic ramifications.\n  - Geopolitical risks and political strife in some countries.\n  - Crisis legacies: long-term unemployment and associated loss of human capital; nonperforming loans clogging bank balance sheets.\n  - Emerging and low-income commodity exporters facing balance of payments pressures, debt overhangs, and low investment.\n  - China’s transition to a more consumer- and service-oriented growth model could be bumpy given continuing credit expansion supporting the official growth target.\n- Interaction with lower potential growth:\n  - Expectations of long-term potential growth have fallen, in part due to demographic and technological trends.\n  - Lower potential growth reduces demand today and investment, generating even lower potential output going forward.\n  - Weak demand can erode productive capacity via loss of labor skills, discouraged labor force participation, lower business dynamism, and slower diffusion of technological best practice."
    },
    {
      "heading": "Policy implications and recommended actions",
      "content": "- Overarching guidance:\n  - Policymakers should not accept current growth rates as a “new normal.”\n  - Political leaders should offer a narrative explaining long-term developments and propose policy actions to restore middle classes and a sense that benefits of growth are more fairly shared.\n- Policy mix and priorities:\n  - Deploy all main policy levers efficiently: growth-friendly fiscal policies, well-sequenced structural policies, and monetary policy support for anchored inflation expectations.\n  - Design efficient policy packages to exploit synergies across instruments and across countries.\n  - Consider incidence of measures across different income groups and accompany reforms with actions to support social cohesion while promoting economic growth and stability.\n\nSource: A Spanner in the Works: An Update to the World Economic Outlook (Maurice Obstfeld, July 19, 2016).\n\n---\n\n Content in this bundle\n\n- IMF博客：更复杂的局面：世界经济展望最新预测； 2016年7月19日\n  - IMF博客：更复杂的局面：世界经济展望最新预测； 2016年7月19日 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - IMF博客：更复杂的局面：世界经济展望最新预测； 2016年7月19日 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\n References\n\n- عربي\n- World Economic Outlook Update\n\nSource: https://www.imf.org/en/blogs/articles/2016/07/19/a-spanner-in-the-works-an-update-to-the-world-economic-outlook"
    }
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    "Authors: Maurice Obstfeld",
    "Published: July 19, 2016",
    "Event dates and authorship:",
    "Revised global growth projections:",
    "Geographic concentration of the slowdown:",
    "Scope of Brexit’s direct effects:",
    "Model-based illustrative scenarios presented alongside the baseline:",
    "Drivers required for alternative scenarios to materialize:",
    "Why the baseline retains more weight:",
    "Ongoing structural and cyclical vulnerabilities:",
    "Interaction with lower potential growth:",
    "Overarching guidance:",
    "Policy mix and priorities:",
    "**IMF博客：更复杂的局面：世界经济展望最新预测； 2016年7月19日**",
    "[عربي](http://blog-montada.imf.org/?p=4412)",
    "[World Economic Outlook Update](http://www.imf.org/external/pubs/ft/weo/2016/update/02/)"
  ],
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