Between the United States, Britain, Europe, Russia, China, Middle East and Latin America, pick one without looming troubles that could reverse the gains Jamaica has made over the past 18 months.
That is how the founder of Cool Corporation Joe Issa warns of the International Monetary Fund’s near certainty that one thing or another could happen across the continents that may impact the current global economic recovery including Jamaica’s.
“It is one of those times I wish the IMF be wrong about looming global shocks that may derail Jamaica’s current growth trajectory, especially after many years of stymied economic growth. It is particularly disheartening as it will be through no fault of ours,” said Issa, who is a member of the Past Presidents Advisory Committee of the St. Ann Chamber of Commerce.
In bumping up its global growth forecasts, the IMF predicts advanced economies to grow by 2.2 percent this year and two percent in the next while emerging and developing countries are forecast to grow at a more robust 4.6 percent.
In particular, it cited the Eurozone as a whole, which is predicted to grow to 2.1 percent this year, up from the 1.8 percent recorded last year. In Britain, however, uncertainty surrounding Brixit could drag growth.
It cited the strengthening of economic activity in the US, with the 2017 forecast moving up a tenth of a percentage point since July’s estimate of 2.2 percent, slowing to two percent next year. However, said the Trump administration’s policy proposals for tax cuts and stimulus appear mired in uncertainty.
The IMF also moved Russia’s forecast for the year up by a sharp four tenths to 1.8 percent, marking a turnaround after two years of recession as oil prices stabilise and market confidence improves.
Moreover, to meet their stated goal of doubling real GDP growth between 2010 and 2020, it said Chinese officials are expected to maintain high levels of public investment and pro-growth policies, with growth due to rise by 6.8 percent this year and 6.5 percent the next.
However, the IMF warns that dangers for the current recovery lurked on the horizon, citing economic shocks and slow-burning dangers from different directions, which could make all of this short-lived.
Among the real dangers cited are faster-than-expected interest rate hikes in the United States or Europe, economic credit troubles in China, persistently low inflation in the developed world, a wholesale rollback of post-crisis financial industry rules, a sudden shift toward protectionism, and geopolitical tensions.
Weak oil prices along with violence and strife in the Middle East and Latin America, as well as a “cliff-edge” Brixit could threaten to undermine the current economic progress – making reforms much harder.
The IMF said all of this called for action “that should take place now, while times are good,” advising countries with near full employment to pay down public debts, while those with budget surpluses should spend on education and infrastructure. It also called on central banks to raise interest rates smoothly and for governments to invest in job training to bring down youth unemployment.
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