by Frank James
There's some thinking that the U.S. economy might be able to weather the current economic downturn thanks to exports. Maybe. But the International Monetary Fund has a report out today that makes it appear that exports may not be able to significantly prop up the U.S. economy.
In its report on the global economic outlook, the IMF indicates that the crash in the U.S. housing market, as well as the meltdown of credit markets, will put the brakes on the world economy's growth.
Indeed, the fund's economists say there's a one in four chance of a world recession in the 2008-2009 time period.
In a press release on the report, the IMF said:
Global growth will decelerate in 2008, led by a sharp slowdown in the United States, amid a housing correction and a financial crisis that has quickly spread from the U.S. subprime sector to core parts of the financial system, the IMF says in its latest World Economic Outlook.
Citing the unfolding financial market turmoil as the biggest downside risk to the global economy, the April 2008 report said the IMF expects world growth to slow to 3.7 percent in 2008—0.5 percentage point lower than what was forecast in the January 2008 World Economic Outlook Update.
Further, world growth would achieve little pickup in 2009, and there is a 25 percent chance that the global economy will record 3 percent or less growth in 2008 and 2009, equivalent to a global recession.
Here's a table from the IMF release. Among advanced economies, only Italy will have worse growth than the U.S. Canada is the U.S. largest trading partner, followed by China, Mexico, Japan and Germany. Mexico isn't on the table but the IMF predicts it will come in at 2.0 for 2008 and 2.3 for 2009.
For the U.S. economy near-term, there was little good news from Simon Johnson, the IMFs chief economist.
Blaming the twin forces of deteriorating financial market conditions and the continuing correction in the U.S. housing market, the IMF predicts that the United States will slip into a "mild recession" in 2008, from which it will recover only modestly in 2009. This reflects the time it takes for financial institutions and households to resolve their balance sheet problems.
"Against the backdrop of weak financial market confidence, we expect consumption to remain weak in the coming quarters due to deteriorating labor market conditions, sluggish growth in disposable incomes, higher energy costs, and tighter constraints on household borrowing," Johnson said.
"Notwithstanding aggressive easing by the Federal Reserve and a timely fiscal stimulus package, signficant strains in housing and credit markets are likely to be protracted," he added. The IMF estimates that, from 2007 until end-2008, house prices in the United States would have fallen by about 14-20 percent
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Comments
"BUSH DUMMY CORPORATIONS SPEAKS"
SELL,SELL, SELL, SELL, SELL, "CONSOLIDATE AND DO NOT EVALUATE"
SELL, SELL, SELL, "THAT WOMAN IS COMING" "THAT BLACK MAN IS COMING"
SELL, SELL, SELL!
SHUT DOWN ALL "PHONY" CORPORATIONS BOTH DOMESTIC AND FOREIGN ALIKE.
"IT'S TIME TO GET SERIOUS AND PROTECT THE COMPANIES THAT PROTECTED US"
NO IMMUNITY
NO "MARSHALL LAW IMMIGRATION"
NO 11.2 MILLION "Z" WORKERS PAYING INTO OUR "PRIVATE SOCIAL SECURITY FUNDS"
SELL, SELL, SELL, HYDE, HYDE, HYDE! NO REAL ID.
HYDE, HYDE, HYDE ALL MONETARY DEALINGS WITH AT&T, VERIZON WIRELESS, CARLYE GROUP, HALLIBURTON, AND OF "DICK CHENEY'S ENERGY COMMISSION"
SELL, HYDE, SELL, SELL, SELL.
IT'S INHERENT CONTEMPT
IT'S "NUREMBURG"
IT'S THE ONLY WAY!
NO 45 DAY STAY
NO SIX MONTH "REPRIEVE"
IT'S ROMP 2008 TIME, AND IF YOU DON'T SELL IT, "HYDE" IT, ERASE IT, OR CONSOLIDATE IT.
YOU MIGHT BE THE ONE TO TESTIFY!
GET PAUL WOLFOWITZ ON THE LINE SOMEONE!
HOW MUCH DID WE MAKE ON POPPY THE LAST FIVE YEARS.
SELL, SELL, SELL, SELL!
Posted by: Roger Morris | April 9, 2008 4:33 PM
Maybe our good buddies in Saudi Arabia will help us out huh?
Posted by: bill "Hussein" r. | April 9, 2008 4:38 PM
Going to be ruff for Mcbush this fall. Are YOU better off than you were seven years ago? Only the head in the sand, 19%, dead ender, hatin' machine, republicrites will tell it is all rosy. Mainstream America, well, the story is a little different for them. The current resident has handed us a debacle the likes of which hasn't ben seen for decades. And all mcshrub can promise us is more dead American soldiers in Iraq, and more billions of American treasury spent each month to support chainsaw's helliburton (anyone that doesn't think he'll be chairman a month after leaving office is foolining themselves) and its subsidiaries? Nice platform mcshrub.
Posted by: rncbs | April 9, 2008 5:21 PM
McCAIN'S ECONOMIC POLICIES STAY THE COURSE TO KEEP THE BUSH ECONOMIC MIRACLE ROLLING ALONG:
"This morning David Sirota's column in the Denver Post shows how McCain's breathtaking flip flops "have run that 'Straight Talk Express' into the ditch of hypocrisy. Just look at McCain's actions on two huge issues: energy and campaign-finance reform... Now, rushing to build a war chest, McCain is doing everything short of putting a For Sale sign on his forehead. During a nationwide fundraising tour, he was showered with big donations after defending the lobbyist-written trade policies that have driven down wages. He is sure to raise even more cash as he shows his Keating Five roots shilling for the financial industry. Last week, approaching the 21st anniversary of that scandal, McCain followed the advice of banking executive-turned-campaign-adviser Phil Gramm and demanded Congress oppose new Wall Street regulations in the wake of the credit crisis".
http://downwithtyranny.blogspot.com/2008/04/mccains-economic-policies-stay-course.html
Is there a Republican out there anywhere who can actually think for themselves and come up with some new policy proposals that might actually help fix things in regards to the economy and not continue to make things worse? because it's obvious that McCain can't.
No, it's much more important for the Republicans to blabber on and on about what Obama's pastor may or may not have said.
Posted by: John E | April 9, 2008 7:03 PM
imf dirty mf
takes away everything it can get
always making certain that there's one thing left
keep them on the hook with insupportable debt
and they call it democracy
Posted by: crud | April 9, 2008 10:56 PM
"Are YOU better off than you were seven years ago?"
Posted by: rncbs | April 9, 2008 5:21 PM
YES!
Am older, and sometimes summer comes a little too quick, but YES! Thanks for asking. I love this country.
Posted by: Scott - Houston, Tx | April 10, 2008 3:49 PM