Economic overheating top challenge for Brazil: IMF chief
Thursday, 27 May 2010
BRASILIA, May 26 (Xinhua): The biggest challenge for the Brazilian government is to contain economic overheating, said the head of the International Monetary Fund (IMF) yesterday.
"With (Brazil's economic) growth reaching 7 per cent this year, it is sure there is risk of overheating," Dominique Strauss Kahn told a seminar held by Brazilian TV channel Globonews in Sao Paulo, according to Brazilian media reports.
However, the IMF chief said the Brazilian government is aware of that risk and is taking measures.
Kahn said that the country's economic growth rate should not be above 5 per cent next year. "The history of Brazil is a successful one, but success does not last forever and can be destroyed," he cautioned.
On global economy, the IMF chief said that the recovery is faster than his organization had expected, and recent declines in stock markets do not mean the world economy is getting worse.
"We have many countries that emerged from the crisis such as those from Asia and Latin America and that brings us confidence. And we believe that the recovery will continue," he added.
Kahn noted that the main risk to global recovery is the debt crisis in Europe, where some countries owe a very high level of debts, leaving many question marks.
The IMF chief also said it will take time to establish new regulations for financial markets. Related measures being taken by the United States and the European Union are positive, though their effectiveness is still to be determined.
He stressed the need for a "central coordination" among all economies, but said that doesn't mean all countries should adopt the same policies.
"With (Brazil's economic) growth reaching 7 per cent this year, it is sure there is risk of overheating," Dominique Strauss Kahn told a seminar held by Brazilian TV channel Globonews in Sao Paulo, according to Brazilian media reports.
However, the IMF chief said the Brazilian government is aware of that risk and is taking measures.
Kahn said that the country's economic growth rate should not be above 5 per cent next year. "The history of Brazil is a successful one, but success does not last forever and can be destroyed," he cautioned.
On global economy, the IMF chief said that the recovery is faster than his organization had expected, and recent declines in stock markets do not mean the world economy is getting worse.
"We have many countries that emerged from the crisis such as those from Asia and Latin America and that brings us confidence. And we believe that the recovery will continue," he added.
Kahn noted that the main risk to global recovery is the debt crisis in Europe, where some countries owe a very high level of debts, leaving many question marks.
The IMF chief also said it will take time to establish new regulations for financial markets. Related measures being taken by the United States and the European Union are positive, though their effectiveness is still to be determined.
He stressed the need for a "central coordination" among all economies, but said that doesn't mean all countries should adopt the same policies.