Questionable Assumptions

This from a CNNMoney article:

NEW YORK (CNNMoney) — The International Monetary Fund said Monday that the global economy should continue to limp along at a modest pace, assuming leaders in Europe and the United States do not make things worse.
In the latest update to its World Economic Outlook, the IMF said it expects the global economy to grow 3.5% this year and 3.9% in 2013. That’s “marginally lower” than what the IMF predicted in April.

“The global recovery continues,” said Olivier Blanchard, director of the research department at the IMF, during a press conference in Washington. “But it is a weak recovery, indeed a bit weaker than we forecast last April.”

After a better-than-expected performance in the first quarter, the U.S. economy is projected to grow 2% this year and 2.3% in 2013, according to the report. Both rates are down 0.1% from the April outlook.

The IMF said its predictions are based on two key assumptions: That euro area governments will implement proposed reforms to stabilize the currency union and that U.S. officials will stop the nation from falling off a “fiscal cliff.”

Those are some big assumptions, and they don’t give me any comfort.

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