The world will grow less than expected: only 3.2% – Los Andes (Argentina)

The International Monetary Fund (IMF) warned yesterday about the risks to the world economy and urged governments to prioritize measures that allow resume immediately the path of growth.

In this scenario, IMF again reduced its forecast global growth in 2016 to a “modest 3.2%” in the midst of a scenario marked by growing uncertainty about the persistence of economic and political risks.

This projection represents a cut of 0.2 percentage points relative to the forecast of the IMF in January. For 2017, the IMF projected global growth of 3.5%, also 0.1 percentage point cut on the expectation expressed in January.

In his new Panorama of World Economy, IMF stressed the overall performance has been “too slow for too long” in a box prompting the third adjustment to the consecutive decline in its projections.

Among the most serious concerns expressed by the financial institution highlights called Brexit, the eventual departure of Britain from the European Union, a step that the IMF would cause “severe damage” not only to that block but to the global economy.

in addition, the IMF said in their new study, the eventual departure of Britain could start a cycle of taking “more nationalist policies, including some protectionist”.

persistent Risks

Another major concern is financial instability, a phenomenon that directly affects the trust and demands of economies.

the IMF chief, Maurice Obstfeld, an economist highlighted in the presentation of new report since last year they have been “two different rounds of global financial turbulence”. According to the IMF, another factor of economic imbalances at the global level is the persistent instability in Syria, where violence led to the displacement of millions of people toward neighboring and European countries.

For the IMF the arrival of the flow of refugees to Europe, where there is a scenario of high unemployment, kicking off a wave of “nationalism”. “Across Europe, the political consensus that once the European project promoted is falling apart,” warned the IMF.

In the view of Obstfeld, if the risks are not faced appropriately entire world economy you can start the path to a widespread recession. “The more fragile the growth are higher chances that risks leading to the world economy less than the quagmire speed,” he said.

To Obstfeld, “less growth means less space for error, “and therefore,” those responsible for the policies can not ignore the need to prepare for possible adverse outcomes. ” Among the major economies, only China had an upward revision, although the IMF said that China is in a transition to sustainable growth “based on consumption and services”.

among the so-called emerging economies, the IMF noted a tendency to contraction, especially in Russia and Brazil, being that in the case of the major

South American economy recession comes from the hand of a severe political crisis.

Brazil, Latin America will fall 0.5%

Dragged by Brazil and Venezuela, Latin America and the Caribbean recorded in 2016 a second year of economic downturn before rebounding to positive territory in 2017, estimated yesterday the IMF pessimistic than in January.

in a weak and prone to worsening global scenario, the IMF estimated that regional GDP will decline 0.5% this year, higher than that of 0 fall, 3% published by the agency in January.

This year, economic performance in the region will also be worse than in 2015, when the countries of the region contracted 0.1%, said the institution, held its annual meeting in Washington this week.

if realized the estimates of the Fund for 2016, Latin America and the Caribbean have had two consecutive years of recession, something unprecedented since 1982-1983 when the crisis debt triggered the so-called “lost decade” for the region

the fall would stop in 2017. the IMF expects a strengthening of economic activity in all countries, with regional growth of 1.5%.

Affected dissimilar way by the environment, the growth prospects of countries in the region have separated: while Mexico, Central America and the Caribbean benefit from the US recovery, and in some cases the fall in energy prices, South America remains “strongly affected” by the low prices of raw materials.

in Brazil, a fall of 3.8% economy-the result identical to 2015 is expected , as the sharp recession and “domestic uncertainties” difficult making corrections in the government of Dilma Rousseff, that parallel battle for political survival.

“in Latin America, the decline in Brazil was deeper than expected “, although in 2017 a brake is expected to economic contraction in the seventh economy in the world, the IMF said its projections are subject to” significant uncertainties “.

in Argentina, the third largest economy in the region, policies of economic liberation of President Mauricio Macri increase the possibility of growth in the medium term, with no immediate risks, said the Fund.

According to the IMF, “the current push to correct macroeconomic imbalances and microeconomic distortions in Argentina has improved growth prospects in the medium term, but the adjustment may generate a mild recession in 2016 “with an estimated drop in GDP of 1%.