Global outlook has improved, despite US fiscal impasse

Headlines from the IMF meetings in Washington this week will be dominated by warnings of theconsequences of the US government defaulting on its debts and the US central bank exiting prematurelyfrom QE. However, in many respects both the US and world economies are in better shape than theyhave for some time. Meanwhile, the unresolved debt and competitiveness problems of the euro-zoneand the structural slowdown in emerging economies are more serious problems than those of the US.