The International Monetary Fund's latest global economic forecast makes for unhappy reading. You may remember that, some years back, it was fashionable to ask whether the world economy could continue "flying on one engine" — meaning the United States. America's boom and import appetite boosted other economies. After the U.S. crash in 2008, the role of global engine shifted to the so-called BRIC countries (Brazil, Russia, India and China) and other "emerging market" nations. Their strong growth offset some weakness in America, Europe and Japan. The new world helped rescue the old.
Well, you can forget that. There is no engine anymore.
The IMF report confirms what's been increasingly obvious: Many emerging-market countries — led by China — have stumbled. By our lights, their growth rates remain high because they have huge labor forces and haven't exploited all existing technologies. But the declines are sizable and could get worse. From 2005 to 2011, China's annual growth averaged almost 11 percent; in 2013, the IMF expects 7.8 percent. For India, the IMF forecasts 5.6 percent this year, down from a 2005-11 average of 8.4 percent. Brazil has also decelerated.