3 Repeated efforts to draw attention to the risks posed by global imbalances culminated with the launch in 2006 of multilateral consultations among systemic economies under the umbrella of the IMF. For sure, there was no lack of analysis or discussion. But there was a lack of corrective action, and a lack of enforcement of the agreed corrective policy measures.
What we are witnessing today is a disorderly unwinding of the past build-up of imbalances. Not only are growth forecasts being revised downwards sharply, but so are current account projections. Consider just one figure: the November International Monetary Fund projections suggest that the US current account deficit could come down to 3.3% of GDP by next year.