If you look at one chart in the October 2013 World Economic Outlook, make it chart 1.13. For successive IMF forecasts, the chart shows how far output is below the pre-2008 trend. This sort of “hedgehog chart”, so called because the spikes from incorrect forecasts can resemble the creature, demonstrates how thinking has changed in the fund since the crisis started.
A number of things stand out.
1. For most areas, the red line, representing the forecast produced in April 2009 at the worst moment in the crisis initially proved too pessimistic. The world did better than feared.
2. Sadly, most areas are no longer beating the April 2009 forecast. Output in the world economy is now below that forecast for 2013 for the globe, the US, the eurozone and Japan. In developing Asian economies, output is now projected to fall below the 2009 forecast next year. April 2009 still appears too pessimistic only for Latin America, a region many think has been disappointing of late. Read more