{ "title": "IMF Survey : Global Economy Faltering from Too Slow Growth for Too Long", "publication": "IMF News, April 12, 2016", "sourceUrl": "https://www.imf.org/en/news/articles/2015/09/28/04/53/sonew041216a", "canonical": "https://www.imf.org/en/news/articles/2015/09/28/04/53/sonew041216a", "overlayPath": "/en/news/articles/2015/09/28/04/53/sonew041216a/index.md", "summary": "Global growth continues, but at a sluggish pace that leaves the world economy more exposed to risks, says the IMF&rsquo;s latest <i>World Economic Outlook</i> (WEO).<b> </b>", "publishDate": "2016-04-12", "sections": [ { "heading": "Global outlook and headline forecasts", "content": "- WEO forecasts global growth at 3.2 percent in 2016 and 3.5 percent in 2017.\n- These figures represent downward revisions of 0.2 percent and 0.1 percent, respectively, compared with the January 2016 Update.\n- Key characterization: growth continues but at a sluggish pace, leaving the world economy more exposed to risks.\n- Analytical point: “Persistent slow growth has scarring effects that themselves reduce potential output and with it, demand and investment.” — Maurice Obstfeld." }, { "heading": "Advanced economies: moderate recovery", "content": "- Projected growth in advanced economies: about 2 percent.\n- United States:\n - Expected growth in 2016: 2.4 percent (described as flat at 2.4 percent).\n - Modest uptick expected in 2017 (no numerical value provided).\n - Domestic demand supported by improving government finances and a stronger housing market; drag from a strong dollar and weaker manufacturing.\n- Euro area:\n - Growth projected at 1.5 percent in 2016 and 1.6 percent in 2017.\n - Constraints: low investment, high unemployment, weak balance sheets.\n- Japan:\n - Growth projected at 0.5 percent in 2016 and -0.1 percent in 2017.\n - Drivers: weaker than expected growth and inflation, sharp fall in private consumption, scheduled consumption tax increase." }, { "heading": "Emerging and developing economies: slowing further", "content": "- WEO projects growth for emerging markets and developing economies at 4.1 percent in 2016 and 4.6 percent in 2017.\n- Contributing factors to weaker prospects:\n - Slowing growth in oil exporters due to oil price decline.\n - Weak outlook for non-oil commodity exporters, including in Latin America.\n - Modest slowdown in China as growth shifts from manufacturing and investment to services and consumption.\n - Deep recessions in Brazil and Russia; weak growth in some Latin America and Middle East countries hit by oil price decline and conflicts.\n - Diminished growth prospects in many African and low-income nations due to the unfavorable global environment.\n- Positive performers:\n - India described as a bright spot with strong growth and rising real incomes.\n - ASEAN-5: Indonesia, Malaysia, Philippines, Thailand, and Vietnam performing well.\n - Mexico, Central America, and the Caribbean benefiting from the U.S. recovery and, in most cases, lower oil prices." }, { "heading": "Risks to the outlook", "content": "- Risks are more pronounced in a weak growth environment; notable risks listed:\n - Return of financial turmoil impairing confidence (e.g., additional exchange rate depreciations in emerging market economies worsening corporate balance sheets; sharp decline in capital inflows forcing rapid compression of domestic demand).\n - Protracted period of low oil prices further destabilizing oil-exporting countries.\n - Sharper slowdown in China than currently projected, with spillovers through trade, commodity prices, and confidence, possibly leading to a generalized global slowdown.\n - Noneconomic shocks: geopolitical conflicts, political discord, terrorism, refugee flows, global epidemics — these could have significant spillovers if unchecked.\n- Upside possibility: decline in oil prices may boost demand in oil-importing countries more strongly than currently envisaged, partly via consumer perceptions of lower-for-longer prices." }, { "heading": "Policy recommendations: three-pronged approach", "content": "- WEO emphasizes a three-pronged policy approach: (1) structural reforms, (2) fiscal support with growth-friendly composition and fiscal stimulus where appropriate and where fiscal space allows, and (3) monetary policy measures.\n- Structural reform guidance:\n - Strong need and scope for further structural reforms.\n - Labor and product market reforms in advanced economies can boost growth prospects over the medium to long term.\n - Product market reforms should be implemented forcefully to boost output even under weak macroeconomic conditions and without weighing on public finances.\n - Where possible, narrowing unemployment benefits and easing job protection should be accompanied by other policies to offset short-term costs on vulnerable groups.\n - Reforms coupled with fiscal support are most valuable, including reducing inefficient taxes on labor and increasing public spending on research and development and active labor market policies.\n- Monetary and exchange rate guidance:\n - In many advanced economies, accommodative monetary policy remains essential to support economic activity and lift inflation expectations.\n - In many emerging market and developing economies, monetary policy must address weaker currencies’ impact on inflation and private sector balance sheets.\n - Exchange rate flexibility, where feasible, should be used to cushion terms of trade shocks.\n- Financial sector and contingency planning:\n - Further financial sector strengthening is essential to create a context in which monetary, fiscal, and structural policies can be most effective.\n - Policymakers need contingency plans and collective measures in case downside risks materialize.\n - Cooperation to enhance the global financial safety net and global regulatory regime is central to a resilient international and financial system.\n\nSource: IMF Survey : Global Economy Faltering from Too Slow Growth for Too Long\n\n---\n\n Content in this bundle\n\n- New041216aapdf (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\n References\n\n- https://www.imf.org/en/News/country-focus\n- PRESS CENTER\n- In The News\n- Read report\n- Watch video\n- View press briefing webcast\n- Obstfeld blog\n- Study on structural reforms\n- Emerging markets and capital flows\n- Lagarde speech\n- Update\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2015/09/28/04/53/sonew041216a" } ], "bullets": [ "[Markdown version](/en/news/articles/2015/09/28/04/53/sonew041216a/index.md)", "[Structured JSON version](/en/news/articles/2015/09/28/04/53/sonew041216a/index.json)", "[Bundle manifest](/en/news/articles/2015/09/28/04/53/sonew041216a/bundle-manifest.json)", "Published: April 12, 2016", "WEO forecasts global growth at 3.2 percent in 2016 and 3.5 percent in 2017.", "These figures represent downward revisions of 0.2 percent and 0.1 percent, respectively, compared with the January 2016 Update.", "Key characterization: growth continues but at a sluggish pace, leaving the world economy more exposed to risks.", "Analytical point: “Persistent slow growth has scarring effects that themselves reduce potential output and with it, demand and investment.” — Maurice Obstfeld.", "Projected growth in advanced economies: about 2 percent.", "United States:", "Euro area:", "Japan:", "WEO projects growth for emerging markets and developing economies at 4.1 percent in 2016 and 4.6 percent in 2017.", "Contributing factors to weaker prospects:", "Positive performers:", "Risks are more pronounced in a weak growth environment; notable risks listed:", "Upside possibility: decline in oil prices may boost demand in oil-importing countries more strongly than currently envisaged, partly via consumer perceptions of lower-for-longer prices.", "WEO emphasizes a three-pronged policy approach: (1) structural reforms, (2) fiscal support with growth-friendly composition and fiscal stimulus where appropriate and where fiscal space allows, and (3) monetary policy measures.", "Structural reform guidance:", "Monetary and exchange rate guidance:", "Financial sector and contingency planning:", "[New041216aapdf (PDF)](/-/media/websites/imf/imported/external/arabic/pubs/ft/survey/so/2016/new041216aapdf.pdf){rel=\"external\" type=\"application/pdf\"}", "[https://www.imf.org/en/News/country-focus](https://www.imf.org/en/News/country-focus)", "[PRESS CENTER](http://presscenter.imf.org/)", "[In The News](https://www.imf.org/en/news/search)", "[Read report](http://www.imf.org/external/pubs/ft/weo/2016/01/index.htm)", "[Watch video](http://www.imf.org/external/mmedia/view.aspx?vid=4841191545001)", "[View press briefing webcast](http://www.imf.org/external/mmedia/view.aspx?vid=4842420868001)", "[Obstfeld blog](https://blog-imfdirect.imf.org/)", "[Study on structural reforms](http://www.imf.org/external/pubs/ft/survey/so/2016/RES040616A.htm)", "[Emerging markets and capital flows](http://www.imf.org/external/pubs/ft/survey/so/2016/RES040616B.htm)", "[Lagarde speech](http://www.imf.org/external/np/speeches/2016/040516.htm)", "[Update](http://www.imf.org/external/pubs/ft/weo/2016/update/01/)", "[https://www.imf.org/en/home](https://www.imf.org/en/home)" ], "related": [ { "title": "New041216aapdf", "role": "document", "sourceUrl": "https://www.imf.org/-/media/websites/imf/imported/external/arabic/pubs/ft/survey/so/2016/new041216aapdf.pdf", "binary": { "path": "/-/media/websites/imf/imported/external/arabic/pubs/ft/survey/so/2016/new041216aapdf.pdf", "mime": "application/pdf" } } ], "alternates": { "markdown": "/en/news/articles/2015/09/28/04/53/sonew041216a/index.md", "json": "/en/news/articles/2015/09/28/04/53/sonew041216a/index.json", "bundleManifest": "/en/news/articles/2015/09/28/04/53/sonew041216a/bundle-manifest.json" }, "generatedAtUtc": "2026-09-27T08:02:32.760Z" }