IMF warns global recovery might not sustain
Friday, 8 October 2010
WASHINGTON, Oct 7 (AFP): Rich and emerging economies must dramatically change the way they trade with each other or risk throttling the global economic recovery, the International Monetary Fund warned yesterday.
In its latest economic outlook, the IMF said growth would slow more than previously expected in 2011, as the United States, Europe and Japan continue to struggle and China remains overly dependent on exports.
The recovery is "neither strong nor balanced and runs the risk of not being sustained," warned Olivier Blanchard, the IMF's chief economist.
Painting a picture of a faltering developed world-where business is still struggling to pick up where government crisis spending left off-the IMF predicted global growth would be pared back to 4.2 percent next year.
That is less than the 4.8 percent growth expected this year and 0.2 point below the IMF's July forecast for 2011.
While restocking had helped short-term growth in the United States, Japan and some parts of Europe, the IMF said advanced economies were still reliant on dwindling government spending.
"For the past year or so, inventory accumulation and fiscal stimulus were driving the recovery. The first is coming to an end. The second is slowly being phased out," the IMF said in its twice-yearly World Economic Outlook.
In its latest economic outlook, the IMF said growth would slow more than previously expected in 2011, as the United States, Europe and Japan continue to struggle and China remains overly dependent on exports.
The recovery is "neither strong nor balanced and runs the risk of not being sustained," warned Olivier Blanchard, the IMF's chief economist.
Painting a picture of a faltering developed world-where business is still struggling to pick up where government crisis spending left off-the IMF predicted global growth would be pared back to 4.2 percent next year.
That is less than the 4.8 percent growth expected this year and 0.2 point below the IMF's July forecast for 2011.
While restocking had helped short-term growth in the United States, Japan and some parts of Europe, the IMF said advanced economies were still reliant on dwindling government spending.
"For the past year or so, inventory accumulation and fiscal stimulus were driving the recovery. The first is coming to an end. The second is slowly being phased out," the IMF said in its twice-yearly World Economic Outlook.