fra Zerohedge
As noted earlier, one of the more irrelevant events that took place overnight was that the IMF once again cut its outlook for global growth. Irrelevant, because this is precisely what anyone who has seen the IMF in action in the past has come to expect (see “IMF Comedy Hour: The Complete History Of The IMF’s Growth “Forecasts” Since 2012“, “The IMF’s Comedy Of Quarterly Errors Reveals The Biggest Hockeystick You Have Ever Seen“, “Comedy Of Forecast Errors: Here Are The IMF’s Latest Projections Of Economic Growth” and so on). Sure enough, here is what the latest “global growth forecast” looks like: everything else is flat except 2015P which was cut from 3.8% to 3.5%, and 2016 was also cut by 0.3% to 3.7%.
On the surface nothing too surprising by the institution whose only job, year after year, is to try and stimulate global confidence, and year after year failing and instead making a joke of its economic forecasting abilities.
What drove the latest round of global cuts lower? It wasn’t the US which was actually revised modestly higher (for the time being; it too will ultimately be revised lower), and Europe which was just barely cut.
Here is the main culprit:
But even more disturbing than China’s growth forecast, is what the IMF sees global growth doing, which nobody will be shocked to learn, has once again been drastically slashed lower.
Why is this disturbing? Because as the world is slowly learning, it is all about trade, and central banks can’t print trade.
Without a rebound in global trade, there can be no rebound in global growth period. And indicatively, 2014 global trade was originally expected to grow by 5.5% in the IMF’s January 2013 forecast. It closed at 3.1%, or nearly 50% lower. Expect the 2015 forecast for trade, currently at 3.8%, to also be slashed to a sub 3% print when all is said and done – the first time trade will have a 3%-handle in the 21se century!
And yet, all of the above is largely meaningless as all it really is, is a bunch of economists trying to come up with practical numbers using broken theories as an attempt to boost confidence. And when it comes to the IMF and economists, the only “chart” that is even remotely relevant is the following.
