May 06, 2013 | by Franck Cushner, CFP®
The IMF (International Monetary Fund) is an organization of 188 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.
The IMF on April 16 reduced estimates for global economic growth for 2013. The IMF cut it’s 2013 forecast for global growth to 3.3%, down from a previous forecast of 3.5%, and also adjusted its forecast for 2014 to 4% from 4.1%.
Treasury Secretary Jacob J. Lew urged Congress to fulfill a U.S. pledge to reinforce the war chest of the International Monetary Fund, saying the lender has helped mitigate financial crises from the Middle East to Europe.
“When financial instability occurs in many places around the globe, such as in Europe, it creates headwinds for our economy,” Lew told a House Appropriations subcommittee today. “Without IMF support, more countries would experience even larger financial stresses, and the U.S. economy would suffer through reduced demand for U.S. exports and lower foreign investment in the United States, threatening millions of jobs.”
The IMF itself is concerned with the prolonged stimulus efforts of central banks worldwide. Massive monetary stimulus by major economies is raising risks and threatening financial stability, the IMF said. A continuation of the existing stimulus trends could create significant adverse side effects.
Growth projections vary from country to country with different factors driving growth. Western European countries are forecasted to have less GDP growth in 2014 due to the lingering effects of the euro crisis. African nations such as Nigeria are forecast to have considerable growth due to oil production, while Mexico and Peru are expected to benefit from growing consumer demand throughout South America.
Source: IMF World Economic Outlook April 2013
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