IMF says “Oops”
January 31, 2013
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The International Monetary Fund released a report in January 2013 conceding that it seriously underestimated the consequences of the harsh austerity regime it and other Troika members imposed on Greece. IMF forecasters said in 2010 that drastic spending cuts would lead to economic growth; instead, the economy collapsed and unemployment rose to an official 25 percent. “Forecasters significantly underestimated the increase in unemployment and the decline in domestic demand associated with fiscal consolidation,” the IMF report admits.
Meanwhile, researchers have examined recent IMF prescriptions and found that the IMF always prescribes the same austerity regardless of the underlying economic condition.