An outlook from IMF that triggers worrying thoughts : Excerpts only

WHERE ARE WE HEADED? PERSPECTIVES ON POTENTIAL OUTPUT[1]

"

• Potential output growth across major advanced and emerging market economies has declined in recent years. In advanced economies, this decline started as far back as the early 2000s.
• Unlike previous crises, the global financial crisis has been associated not only with a reduction in the level of potential output in advanced and emerging market economies, but also with a persistent reduction in its growth rate.
• Potential growth in advanced economies is likely to increase slightly from current rates but remain below pre-crisis rates in the medium term. The main reasons are aging populations and the slow increase in capital growth from current rates as output and investment recover gradually from the crisis.
• In emerging market economies, potential output growth is expected to decline further in the medium term, because of ageing populations, weaker investment, and lower productivity growth as technological gaps between these economies and advanced economies get narrower.
• Reduced prospects for potential growth will raise new policy challenges such as achieving fiscal sustainability. Increasing potential output will need to be a priority in major advanced and emerging market economies."

---

[1] World Economic Outlook, April 2015 Prepared by Patrick Blagrave, Mai Dao, Davide Furceri (team leader), Roberto Garcia-Saltos, Sinem Kilic Celik, Annika Schnücker, Juan Yepez, and Fan Zhang; http://www.imf.org/external/pubs/ft/weo/2015/01/pdf/3sum.pdf

Is Latin America the next crisis waiting to happen?

A million people marched in Brazil against the Government. The Real had already lost over 20  % this year against the dollar. Mexican Peso and Chilean Peso are also under pressure. With the strengthening of the dollar there is a strong exodus to that currency. Added to this, is the political storm in Brazil. It looks like a fall time this spring!

One can only see sell signs!

Views expressed without risk or responsibility 

From economic to currency crisis : Africa

Fears that stalk Africa range from Ebola to Europe.

As the prices for Africa's commodities fall to worrying levels,  Africa, unheard of, unwritten about, unsung about will see its poor incomes fall further. With little public accountability and with massive doses of corruption, Africa really does not know where to turn to. Europe, its traditional purported benefactor,  is weakening and with a falling euro has to give less aid to African nations.

China, one big investor at one time, will move slow given that it has its own travails and given that expectations of benefits from African resources have not materialized.

 Countries like Ghana weighed down by ghost enrollments in Government offices and falling incomes, knock on IMF doors but are afraid to accept conditionalities may be for political reasons. Has it any option as its reserves fall?

The World Bank has predicted  that  growth in 2015 in Sub Saharan Africa will be 4.6 %.T

From stagnating  Egypt rattled right from 2011 to stricken Sierra Leone to gold and diamond studded South Africa, there is darkness creeping in. The African countries will see heavy  pressures on their currencies as their real exchangeable values fall.

Foreign Aid, can you hear me?

Views Expressed without risk or responsibility.