The IMF’s World Economic Outlook (Chapter 1), released this morning, is grim:
From the introduction:
The global economy is in a severe recession inflicted
by a massive financial crisis and an acute loss of
confidence. Wide-ranging and often unorthodox policy
responses have made some progress in stabilizing
financial markets but have not yet restored confidence
nor arrested negative feedback between weakening
activity and intense financial strains. While the rate
of contraction is expected to moderate from the second
quarter onward, global activity is projected to decline
by 1.3 percent in 2009 as a whole before rising modestly
during the course of 2010 (Figure 1.1). This
turnaround depends on financial authorities acting
decisively to restore financial stability and fiscal and
monetary policies in the world’s major economies providing
sustained strong support for aggregate demand.
More discussion later.
Once again, the latest economic projection shows the recession running lower, longer, and recovery later than the last projection.
Why is this the universal (not just consistent) case? Why are economists and economic and business institutions unable to stick with a projection (or even revise it upward!) from one quarter to the next?
Because that is what they are paid for. It is exactly the same for IEA’s projections of (always-growing) fossil fuels production, or for CERA’s projections of (always-shrinking) crude oil prices.