Business
Thursday July 9, 2015
not affect the crisis in Greece
By Liliana Franco
The latest update on the global economic outlook the IMF did not bring good news for Argentina’s economy. In updating the report Economic Outlook Global for the current year provide for a reduction of almost 16% in the prices of raw materials (excluding petroleum), a slowdown in growth in China and a deepening recession in the main trade partner, Brazil, whose economy would recede 1.5%. However, the IMF believes that, in principle, the effects of Greek crisis on the world economy will be “small” and “limited”.
The Fund measurements yield the raw materials (excluding energy) fell 4% last year and are projected to collapse 5.6% in 2015, negative trend that would continue in 2016 with a further decline of 1.7%. This trend is linked to the modest growth in the world in general and China in particular.
The Asian giant, which is the greatest demand for commodities, has been losing momentum in its growth rate. After gains of nearly 10% in recent decades, in recent years it reduced their growth and this year the IMF expects an expansion of “only” 6.8% and even lower, 6.3%, in 2016 (India grow for the first time in many years above, with 7.5%).
It should be noted that among the risks that the multilateral agency warns, there is a possibility of greater difficulty in China’s transition to a new model (less dependent on exports and more focused on domestic consumption), as illustrate “the recent turmoil in financial markets.”
As for oil prices, international agency expects a fall in the year of nearly 40% average ($ 59 per barrel), with partial recovery of 9% for 2016 . In Argentina the impact will be mixed, as short-term favors the external accounts, as the country is an importer of fuels, but conditions the development potential of unconventional resources such as Vaca Muerta deposit.
Another worrying aspect of the report is that the Fund increased half percentage point decline expected for the Brazilian economy in the current year . Estimated that the recession in the major partner in the Mercosur will be 1.5% in 2015 with modest growth of 0.7% for 2016. The issue is particularly serious for Argentina because, according to data from the first five months, almost one of every five dollars of domestic exports went to the Brazilian market.
But not just in Brazil, the whole of South America presents problems. According to Olivier Blanchard , chief economist of the Fund, the prospects for Latin America are not very good, as evidenced by the persistent cuts over the past five years in the growth projections for the region. 2015 the area growth would be only 0.5% and 1.7% for 2016.
Blanchard noted in this regard that the prices of materials premiums stabilized or fell and financial conditions are harder, where “all countries in the region will have to make adjustments.”
; bull & amp; Greek tragedy
“What happened in Greece is dramatic and sad and will come hard times for this country,” said Olivier Blanchard. , however, downplayed the problem, stating that the Greek economy is small-about 2% of the eurozone and estimated that the transmission mechanisms of the crisis on both financial matters as trade are limited and allow us to provide the effects will be small (in the world).
However, he warned that in cases like these, the concern is what is called “unknown unknowns”, ie risks that can lead to more serious consequences.
In a press conference, the chief economist acknowledged that “There is little doubt that Greece is suffering and could suffer even more under a scenario of disorderly exit from the euro zone.”
Blanchard also noted that growth rates in emerging countries have had a significant slowdown. The IMF now expects this group of countries will grow 4.2% in the year below 4.6% in 2014, reflecting the impact of lower commodity prices and tightening in external financing conditions.
However, it is expected that by 2016 the growth in emerging and developing markets will recover at a rate of 4.7% and this influences the expected improvement forecast in economies that went through difficulties as Russia and some Middle East and North Africa.
But for developed economies -United States, EU and Japan, a gradual recovery is expected. After growing 1.8% in 2014, this group of countries would advance 2.1% in 2015 and 2.4% in 2015.
Much of the lower activity in the developed world due to low higher than expected in the US economy as a result of particular phenomena including the harsh winter, the problems of strikes in the ports and a sharp reduction in capital spending in the oil sector was highlighted.
However, it is considered that the developed economies will continue a gradual recovery in activity by favorable financial conditions, fiscal policies in the euro zone, lower prices oil, improved confidence and progress in labor markets.
In addition the Fund expects 3.3% global growth in 2015 slightly below the 2014 record of accelerating global expansion to 3.85% by 2016.
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