Tuesday, August 25, 2015

EW News Desk Team — Despite Sharp Slowdown in Chinese Economy, IMF Says Not Recession, Just "Necessary Adjustment"

According to Carlo Coattarelli, an IMF Executive Director, "Monetary policies have been very expansive in recent years and an adjustment is necessary…It's totally premature to speak of a crisis in China.
Coattarelli reiterated the IMF's prior forecast of a 6.8 percent expansion of the Chinese economy for 2015. While this rate of growth is quite respectable, it is less than 2014's growth of 7.4 percent. To put that figure into perspective, IMF predicts global growth at 3.3 percent for 2015, and US economic growth a mere 2.5 percent. That makes China's economic growth still quite admirable and well ahead of most other major economies.
According to the IMF, the slowing of the Chinese economy is natural. Although it created a shock to the global financial markets, the IMF believes this was merely reactionary and not indicative of long-term institutional weakness. The IMF sees the slowdown as the natural consequence of years of rapid growth with little breaking, even as the rest of the world suffered a slowdown.
Markets (over)reacting to "bad news," or just looking for an excuse to correct?

3 comments:

Matt Franko said...

" IMF predicts global growth at 3.3 percent for 2015...."

Maybe they're thinking Earth's net imports from Mars are going to be reduced this year?

Ryan Harris said...

Ohh Franko, you've nailed it! That must be why global exports don't equal imports..

Bob said...

It's the accumulation of Martian dust on the Earth's surface. Something like 40,000 tons of dust are imported each year.