The International Monetary Fund released an update to its world economic forecasts earlier this week, and it is (mostly) pretty positive for wool. While the IMF’s forecast for global economic growth in 2017 and 2018 remains the same as in its April forecasts, the IMF has ramped up its forecasts for economic growth in China, Europe and Japan. Of particular note are the forecasts for Italy. The IMF now predicts that economic growth in Italy will be 1.3% in 2017 and 1% in 2018. While on the face of it these forecasts look pretty subdued, they are considerably better than the forecasts in April. Furthermore, if Italy achieves the predicted growth rate of 1.3% in 2017, it will be the country’s fastest rate of economic growth since 2010 when it was recovering from the massive fall in the wake of the Global Financial Crisis (GFC). The IMF has also lifted its forecasts for other European countries, Japan and, most importantly, China. On the other hand, it has wound back its forecasts for the US and for the UK.
While the IMF has lifted its forecasts for a number of countries, it notes that the growth rates in general remain below ‘pre-crisis’ (i.e. pre-GFC) levels. Overall, the forecasts are good, positive news for wool as they create a foundation for increased consumer demand. It is also more important for higher valued items such as wool clothing and interior textiles.
Full details including a table showing the new IMF forecasts for the world and the major wool consuming countries compared with the past five years are included in the NCWSBA Weekly Newsletter for the week ending 28th July 2017. Available to NCWSBA members.