The International Monetary Fund is not always the most reliable forecaster of economic growth, however its annual ‘World Economic Outlook’, its core publication, is an important reference point for the government’s economic planning.
The description of the world’s economy by Oliver Blanchard, the IMF’s chief economist, was that “we have moved from a two-speed recovery to a three-speed recovery…with a growing bifurcation between the United States on one hand and the euro-area on the other”. The emerging economies are forecast to grow by over 5% in 2013 and 2014 whilst China is seen as growing by 8% by the end of this year, although the IMF admitted that it had not absorbed the latest and less buoyant growth figures out of China.
As regards the crucial area of world trade, the logistics sector, volume growth will be very modest at 3.5% for 2013 and 5.3% for 2014. This compares to an average of 7.2% between 1995-2004 or the 6.3% seen in 2011.
Import growth into developing economies will continue to be strong at 6.2% in 2013 and 7.3% in 2014 but overall economic activity in the emerging markets has already slowed. India in particular is seeing a marked deceleration, with GDP forecast to grow by 3.8% this year and 5.1% next year. Other emerging markets will be hit by the effects of lower commodity prices and possibly financial instability.
The perspective of the world economy that the IMF is presenting is one both of lower growth but also of more balanced growth. Large parts of the developed world are growing again but not fast enough to resume a normal expansion of world trade. Emerging markets are growing their domestic markets but again this is not fast enough to resume the sort of expansion in world trade previously seen.
If the IMF’s forecasts are to be believed, the logistics sector will continue to see rather dreary prospects for the next eighteen months with growth spread around the world, but rather thinly spread and characterised by considerable volatility and uncertainty.