IMF report focuses on 2012-2013 world economic outlook : Voice of ...

According to the report, the world economy will grow 3.3 percent this year, and 3.6 percent next year. Givi Machavariani, expert from the Moscow-based Institute of World Economy and International Relations of the Russian Academy of Sciences, warns against overdramatizing the situation.

"I don?t think that something extraordinary is taking place," Machavariani says, referring to the 2009 global economic slowdown that he recalls was followed by an uptick in 2010.

It is common knowledge that the 2008 global economic crisis started in the United States, the world?s largest economy that has now surpassed its pre-crisis level thanks to the GDP growth. As for the US banks, they refrain from granting loans and hold plenty of liquid assets in anticipation of possible financial risks. In this vein, the level of fixed capital investments remains a priority, believes Alexander Apokin, a Moscow-based economics expert.

"The existing level will ride roughshod over the economy," Apokin says. "They should improve this index so that they can achieve the 3-percent increase per year," he adds, referring an array of issues related to energy and housing that the US is yet to resolve.

According to the IMF report, the US economy may go into recession due to the so-called fiscal cliff that is seen as one of the scenarios, Alexander Apokin says.

"The US fiscal cliff," Apokin says, "refers to a predicted reduction in the budget deficit if specific laws are allowed to automatically expire or go into effect at the beginning of 2013. These laws include tax increases due to the expiration of the Tax Relief, Unemployment Insurance Reauthorization and other legislative acts that help regulate the US budget and public debt."

As for Europe, it is facing a whole array of problems pertaining to the EU?s GDP worth of more than 16 trillion dollars. Right now, the EU economy remains stagnant below its pre-crisis level, Apokin says.

"The latest events in the EU economy reflected the economic development of the EU countries in the past ten years," Apokin says. "The US banks were dealing with asset write-offs between 2008 and 2009, while European banks completed this process in 2011, something that came amid the EU?s efforts to resolve risks related to government bonds."

As far as investments are concerned, the situation in the EU is far more complicated than in the US because each and every EU economy faces its own problems. On the whole, the eurozone-related problems became more predictable, experts says, lauding the eurozone countries? political will, especially regarding integration.

Source: http://english.ruvr.ru/2012_10_16/IMF-report-focuses-on-2012-2013-world-economic-outlook/

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