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23 May 2012

Lagarde ‘shivers’ contradicted by IMF’s own forecasts

How cold was the room for the IMF's press conference?

By Alex Hern

How cold was the room for the IMF’s press conference yesterday?

The Funds’ World Economic Outlook publishes forecasts of government budget deficits five years into the future, rather like our own Office of Budget Responsibility. The IMF’s current forecast was published last month, and they are forecasting that George Osborne will borrow 5.0 per cent GDP at the end of 2014.

I ask the about room temperature because the IMF also provided a forecast, in April 2010, of Alistair Darling’s deficit cutting plans. They predicted that the UK would have a budget deficit of 5.2 per cent.

So it’s surprising Lagarde said today that “When I look back to 2010 and what could have happened without fiscal consolidation I shiver”.

Not very confidence inspiring that 0.2 per cent makes the head of the IMF shiver is it?

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