Global growth is still weak, its underlying dynamics are changing, and the risks to the forecast remain
to the downside,markets are increasingly convinced that U.S. monetary policy is reaching a turning point, and this has led to an unexpectedly large increase in long-term yields in the United States and
many other economies,notwithstanding the Federal Reserve’s recent decision to maintain its asset purchases. This change could pose risks for emerging market economies, where activity is slowing and asset quality weakening. Careful policy implementation and clear communication on the part of the Federal Reserve will be essential.
Growth in China is slowing, which will affect many other economies, notably the commodity exporters among the emerging market and developing economies.
At the same time, a fragmented financial system in the euro area and worrisomely high public debt in all major advanced economies––remain unresolved and could trigger new crises.
The major economies must urgently adopt policies that improve their prospects; otherwise the global economy may well settle into a subdued medium-term growth trajectory.
The United States and Japan must develop and implement strong plans with concrete measures for medium-term fiscal adjustment and entitlement reform, and the euro area must develop a stronger
union block and reform and put in place a strong financial system.
China should reform its strategy for growth, boosting local consumption and rebalance its model of growth away from exports and investment.
Many emerging market economies need also structural reforms.
to the downside,markets are increasingly convinced that U.S. monetary policy is reaching a turning point, and this has led to an unexpectedly large increase in long-term yields in the United States and
many other economies,notwithstanding the Federal Reserve’s recent decision to maintain its asset purchases. This change could pose risks for emerging market economies, where activity is slowing and asset quality weakening. Careful policy implementation and clear communication on the part of the Federal Reserve will be essential.
Growth in China is slowing, which will affect many other economies, notably the commodity exporters among the emerging market and developing economies.
At the same time, a fragmented financial system in the euro area and worrisomely high public debt in all major advanced economies––remain unresolved and could trigger new crises.
The major economies must urgently adopt policies that improve their prospects; otherwise the global economy may well settle into a subdued medium-term growth trajectory.
The United States and Japan must develop and implement strong plans with concrete measures for medium-term fiscal adjustment and entitlement reform, and the euro area must develop a stronger
union block and reform and put in place a strong financial system.
China should reform its strategy for growth, boosting local consumption and rebalance its model of growth away from exports and investment.
Many emerging market economies need also structural reforms.
