MP says IMF not always right
Last week, the International Monetary Fund (IMF) did its best to persuade voters not to leave the EU. However, it needs to put its figures into context. It is right when it points out that the price of credit default swaps on five-year UK debt – a widely-used proxy indicator for economic well-being – has increased from 17 to 37 since last year. However, over the same period, this price has risen from 15 to 33 in Switzerland, from 26 to 43 in France and from 45 to 65 in South Korea. These increases are not to do with Brexit, as the IMF will be very aware.
In the same vein, the IMF has issued a raft of predictions for the extent to which the economy may be affected by a Brexit. However, this is the same organisation which completely missed the economic crisis of 2007/2008, and which predicted the Greek economy would contact slightly (2.6%) and then return to growth. In reality, the Greek economy in total collapsed by 26%.
John said,
“The IMF is not putting its pronouncements into a proper context. We all know that the international economy is passing through a rough patch, but this is more to do with factors such as the slowdown in the Chinese economy than our referendum.”
“Furthermore, the IMF does not have a monopoly of wisdom when it comes to the global economy. It has frequently been wide of the mark with its forecasts and has missed major economic shocks. We should take its remarks about Brexit with a large pinch of salt.”
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