Friday, 20 Apr 2018
Business

The IMF raises to 2.1% its economic growth forecast for France in 2018

Neither the geopolitical clashes nor the climate of trade war created by Donald Trump have as yet negative effects on the world economy, which is expected to grow by 3.9% in 2018 and again in 2019 according to the International Monetary Fund. That of France is revised by 0.2 point upwards compared to the forecasts of January.
The war is raging in Syria, the UN is unable to find a ground for agreement in the Security Council, US President Donald Trump has launched hostilities on the international trade front, and ten years after the crisis of indebtedness in the United States. United States that had plunged the planet into its worst recession since the 1930s, states and private actors are racking up debts again at historically unprecedented levels. But nothing works, the global economy runs smoothly and the IMF in its new spring forecast announces annual growth of 3.9% this year and still 3.9% next year, according to figures published in its semestrial report World Economic Outlook … »READ ALSO – IMF warns again against protectionism “This prognosis is based on solid and continuous performance in the euro zone, Japan, China and the United States,” said Maurice Obstfeld, the IMF’s economic adviser and head of the Research Department. Washington experts have noted “a revival of international trade and investment in the second half of 2017”, hence their upward revision of 0.2 point global growth prospects compared to their diagnosis of October 2017, even if these global figures of April 2018 bring no change to the revisions already made last January. Carrying wave For its part France also benefits from this wave carrier and the IMF even boosted French GDP growth by 0.2 percentage point (compared to its January forecast), with our GDP growing by 2.1% in 2018, then by 2% again in 2019. Let’s not doubt that these “good figures” will be well-received by Bruno Le Maire, the Minister of the Economy and Finance, who will visit Washington next Thursday, and for three days, to attend the spring meetings of the IMF and the World Bank. Of course, the French economy is still lagging rather than at the peak of euro area growth (2.4% on average this year), and especially Germany (2.5%) and Europe. Spain (2.8%). The international economists do not hide a certain embarrassment, between on the one hand these very satisfactory figures which essentially reflect past results for most of the countries, and on the other hand «the prospects of large-scale commercial conflicts which present a discordant image According to the formula of Maurice Obstfeld. They are therefore led to postpone their concerns on the “medium term” (beyond one to two years), while observing already a slight decrease in the monthly opinion polls of purchasing managers of companies ( the SMIs, Purchasing Managers Index ) pretty much everywhere in the world. “That the biggest economies are flirting with the trade war while the economic expansion is very widely shared around the world and that it stems from the growth of trade and investment may seem paradoxical,” notes Maurice Obsfeld. But he acknowledges, however, that “many households have benefited little or nothing from this growth,” while pointing out that the sluggish wage income in developed countries “is more the result of technological change than international trade.” Trade restrictions with limited effects The IMF is also more dubious about trade restrictions (steel and aluminum tariff increases) announced by the United States last March. “These initiatives will have little effect on the US external current account deficit, which results primarily from domestic spending greater than the Americans’ own incomes.” The IMF is also critical of the effects of the tax cuts announced in December 2017 by the Trump administration , which will add $ 150 billion to the US external deficit in 2019 (according to IMF calculations). Such international imbalances, which in themselves are excessive and worrying, can only be reduced by multilateral cooperation among the major countries, particularly “with regard to unfair trade practices, including with regard to intellectual property rights”. notes the IMF’s economic adviser. This time, it is China that is targeted.

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