IMF forecast – Cheap oil, cheaper euro, more growth – Süddeutsche.de

• The IMF economists are forecasting economic recovery in the euro-zone.
• reason, low energy prices and compared to the US Dollar Euro very weak.
• Countries such as Russia sees the IMF, however, difficult economic times. Background are about the sanctions against the country after the annexation of the Crimea.

Analysis of Nicholas Piper

The plummeting oil price and euro helps the recovery in Europe more than expected. In its latest World Economic Outlook (WEO), the International Monetary Fund (IMF) raised its growth forecast for the euro zone by 0.3 points to 1.5 percent. The fear of a new recession is thus once disappeared. According to figures from the IMF oil will be an annual average of 2,015 per barrel cheaper by almost 40 percent to $ 58.14 as the average for the year 2014 ($ 95.25). The euro slumped to 1.06 dollar since the beginning of the year of 1.21 dollars. Has improved the situation in the strong as well as in the weak euro countries. The strongest economy of Ireland is growing at 3.9 per cent, in Germany it is 1.5 percent. Even for Greece, the IMF experts maintain its forecast of 2.5 percent economic growth, although still is not clear how long the country will remain solvent. Despite the improved outlook for Europe is still growing very slowly by historical standards. Has the anemic growth, as in other industrialized countries, its causes in the aging population, the lack of investment and insufficient productivity of labor and capital. “The expectation that the growth potential in the future grows more slowly, now takes the investment,” says the IMF.

An interesting question will be how the European Central Bank (ECB) deals with the better numbers. First, it could be easier for you now to limit the controversial purchase of securities worth billions, finally, the economy appears to have left the danger zone. On the other hand, the predicted inflation rate of 0.1 percent is well below the official ECB target of 2.0 percent. In addition, a change of course in Frankfurt would again raise the price of EUR. The IMF urges Europeans and Americans have long to quit too soon with the loose monetary policy and thus choking off the economy.

The Governing Council meets this Wednesday. Finance ministers and central bankers of the seven major industrialized countries (G7) come on Friday at the edge of the IMF Spring Meeting in Washington. The biggest risks to the global economy currently come from some emerging countries that were considered until recently as a new economic powerhouses. At worst it is with Russia’s economy. There, the economic output will shrink this year by 3.8 percent. Is caused by low oil prices and, in the language of funds, “geopolitical risks”, ie the war in Ukraine and Western sanctions. For Brazil, the Fund predicts a decline in gross domestic product (GDP). Is an important feature in this year’s development in China. There, the economy is still growing, although at 6.8 percent, faster than almost anywhere else. However, according to Chinese standards and expectations is the least. The country had become accustomed in recent years at double-digit rates. Recently, China had shocked the markets with very poor trading figures. Only exports to Europe declined in the first quarter by 19 percent. The rising dollar brings many Asian countries in distress. Whose companies had massively in debt in the United States to take advantage of the low interest rates. Now they are stuck in the exchange rate case: either they come under pressure to appreciate or to change the course of their own currencies to fall and so threaten financial stability, such as the IMF writes. New findings on the economy can be expected from the joint analysis of the major German research institutes, which will be presented on Thursday in Berlin.