IMF upgrades global growth forecast amid warnings of “fracture points”
By
Nick Beams
24 January 2018
As the World Economic Forum summit of global elites got underway in Davos, Switzerland, the International Monetary Fund (IMF) upgraded its prediction for world economic growth over the next two years.
The IMF pointed to the “broadest synchronised global growth upsurge since 2010,” when the world economy pulled out of the recession of 2008–2009. It estimated that global output increased by 3.7 percent in 2017, a 0.1 percentage point rise on its forecast last October and 0.5 percentage points higher than 2016. The IMF revised its predictions of global growth for 2018 and 2019 upward by 0.2 percentage points to 3.9 percent.
However, a report issued by Oxfam for the Davos summit demonstrated that virtually all of this increase will flow to the oligarchs who dominate the world economy. Last year saw the biggest increase in the number of billionaires in history, as 82 percent of the increase in global wealth flowed to the top 1 percent, while the bottom 50 percent received no increase at all.
Not surprisingly, as the Financial Times reported, the mood among the chief executives gathering for the summit was more upbeat than at any time in the past decade. “With the stock markets booming … it’s no surprise CEOs are so bullish,” Bob Moritz, the global chairman of the accounting and financial firm PwC commented.
While attention is focused on the headline predictions for a rise in global growth, there are warnings, including from within the IMF itself, that the spurt may not last.
In a blog post, IMF chief economist Maurice Obstfeld said the upturn was “good news” but the present economic momentum “reflects a confluence of factors that is unlikely to last for…