The International Monetary Fund has lowered its global GDP growth forecast for 2015 to 3.3% on a number of factors,including China's stock market turbulence and the Greek debt crisis.As well,both the US and Canadian economies have been downgraded by the IMF.A 20% surge in the U.S. dollar brought on by investors taking refuge in US assets has been crimping exports;while in Canada,falling commodity prices have hindered that natural resource-rich country's economic performance.Still,in 2016,the IMF is predicting global growth to rise to 3.8%.
The end result is not a very impressive number,said IMF chief economist Olivier Blanchard,but it's not a catastrophe,either.We're very much where we expected to be.
The Fed can wait a bit longer to raise rates.We're not very far from where we want to be in the US.Take one step back,the US is doing fine.
There has always been a disconnect between the Chinese stock market and the Chinese economy.It may have an effect on spending,but it's more or less octagonal.When you have exchange rates and stock prices moving quickly as they do in China,you don't know how you can handle it.
Any deal in Greece has to have two parts:
1.The Greeks have to do something.
2.There must be aid and debt relief.
The post-financial crisis world is one of high debt,and it doesn't take much,with these debt dynamics,to go wrong.We have to be ready to see other episodes of that kind.*
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