Global Economic Outlooks

The Bank of Canada released its MPR today, which, among other things (more later), lays out its projections for economic growth.

I thought it might be interesting to compare what the Bank is expecting relative to the recently released projections offered by the OECD and by the IMF.

Here are the BoC's forecasts for 2009 and 2010 real GDP growth:

Canada: -3.0; +2.5
U.S.: -2.4; +1.2
E.U.: -3.6; -0.2
World: -0.8; +2.2

Here are those from the OECD:

Canada: -3.0; +0.3
U.S.: -4.0; 0.0
E.U.: -4.1; -0.3
OECD: -4.3; -0.1
OECD+BRIC: -2.7; +1.2

And those from the IMF:

Canada: -2.5; +1.2
U.S.: -2.8; 0.0
E.U.: -4.2; -0.4
World: -1.3; +1.9

a few observations:

the OECD is the most pessimistic, both for 2009, but particularly regarding prospects for 2010 (basically bigger fall in '09 and then no bounceback in '10)

the BoC is more optimistic than either the OECD or IMF not just on how much the U.S. declines this year, but its prospects for next year; neither the OECD nor IMF have projected any 2010 growth for the U.S.

all three sets of forecasts are reasonably bearish on Europe (from -3.6 to -4.2 this year, and more slippage next year)

all three groups of forecasters predict Canada outperforms other advanced economies in 2010, presumably due to its linkages to developing economies

the BoC's forecasts aren't that far off from those of the IMF, but are definitely more optimistic (or, perhaps more accurately, less pessimistic), and the BoC, though it has pencilled in a more gradual recovery than it was previously forecasting, is definitely looking for more of a V-shape than either the OECD or IMF



UPDATE:
the OECD's more pessimistic outlook may be due to its assessment that it takes 4 to 6 quarters for changes in financial conditions to have their full impact on GDP, so the full effect of past tightening in conditions since Sept/08 has not yet been felt; also, it is expecting further large prospective declines in world trade, based on advance indicators; further, it notes that housing recessions are worsening almost everywhere other than the U.S.; it is also concerned that large cyclical increased in unemployment have a tendency to become structural in part, reducing productive potential

notably, the OECD's foresees:
- the U.S. output gap reaching 10% and therefore inflation, after going negative for much of 2009, only stabilizing near 0% at the end of 2010
- strong BRIC rebound in 2010 driving robust rebound in world trade
- the OECD's report noted that it is important to commit to low levels of monetary policy rates for a sufficient period of time, as studies have shown such a commitment to have an effect on lowering the yield curve