IMF Identifies Europe as Risk to Global Recovery

And those predictions for Asia seem a bit too rosy, bloggers say

On Wednesday, the IMF released a report revising world growth forecasts. The U.S. is now predicted to do somewhat, and global growth has been revised upwards overall. Risks remain, however, particularly in Europe: "uncertainties surrounding sovereign and financial sector risks in parts of the euro area could spread more widely," warns Jeremy Clift in the report's summary. How are the usual econoblogging suspects taking the mixed news?

• Pretty 'Daring' Forecasts  "The first assumption is that the US economy will improve by 3.25% this year," notes the 24/7 Wall St. assessment. "There are many factors that could make that number much too optimistic. One is that the American stimulus package shows little signs that it has worked." Meanwhile, "the rate of exports to Europe could falter as the economy of that region deteriorates." The forecast for Europe could be too high, given that governments there are about to "enact austerity programs and increase taxes." The Asia predictions, too, seem optimistic.

• Certainly a Bit 'Too Rosy' for Comfort  "It's hard to envisage a scenario where the IMF's latest projections prove too pessimistic," decides S.D. at the Economist's Free Exchange blog. "The opposite, unfortunately, is only too possible." S.D. also wonders whether the Asia numbers are "too rosy."

• World Should Worry About Europe, U.S. Should Worry About Housing  Annie Lowrey focuses on those two highlighted risks in the report for the global and American recoveries, respectively.
  

• 'Market Doesn't Need a Good Economy,' counters Business Insider's Vincent Fernando, breaking ranks with his fellow bloggers. "It just needs to avoid a disastrous one. Even if the IMF is only two-third's right, then the world is likely to keep chugging forward, even if slowly."

• Developing World Good, Developed World Not So Much, summarizes The Atlantic's Derek Thompson, who notices the report "projects emerging and developing economies like Russia, China and Brazil to grow about 50% faster than the developed world in the next year." In the U.S., "the IMF doesn't expect a high-octane recovery. In fact, it projects unemployment to average more than 9 percent through 2011."