The latest IMF global growth forecasts continued a depressingly long sequence of downgrades. In releasing the forecasts in Washington on Tuesday morning, the IMF head of research emphasised to a much greater extent than on previous occasions the prospect of falling potential growth. This is taking over from the legacy issues associated with the financial crisis as the dominant influence on policy. The IMF is flagging that low growth expectations are beginning to have an effect on current investment and consumption decisions. The only bright spot was in the low income developing economies which were described as remarkably strong with a 6.1% growth rate in 2014 accelerating to 6.5% in 2015. These views are significant from a resource sector investment perspective since a cyclical recovery in the sector would normally require a positive growth surprise that leads to inventory cuts and a fear of raw material shortage. The IMF is effectively saying that without fresh policy steps the likelihood of this happening is reducing.


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James Marlay

Nice wrap up John