The IMF raised its forecast for global growth
The International Monetary Fund (IMF) Wednesday nudged up its forecast for global growth but said the risks to the recovery, particularly the developed countries' public debt and imbalances in capital flows. In fact, the institution has maintained its growth forecast for the eurozone to 1% in 2010, while stressing the fragility of the recovery against the risk of the Greek budget crisis and its possible contagion effects.
In its "World Economic Outlook, the IMF now expects growth of 4.2% against 3.9% estimated in January. The forecast of +4.3% for 2011 is unchanged. In 2009, world GDP had declined by 0.6%.
"The recovery of the global economy has developed better than expected," said Fund."The activity recovers at different rates, timidly in many advanced countries, but strong in most emerging and developing," he noted.
Growth will be slower in Europe (1% in the euro area, 1.3% in the United Kingdom) and Japan (1.9%). It would be higher in contrast to the United States (3.1%). But it would mainly driven by emerging markets and developing countries (6.3%), the Asia head (8.7%, 10% for China).
In this context, the IMF expressed concern about the impact on capital flows."Estimates of IMF economists show that current account imbalances will increase significantly with the resumption of world trade, improving financial conditions and the stabilization of commodity prices at higher levels," said the institution No fax pay day loan.
"The currencies of a number of Asian economies remain undervalued in significant proportions in the case of the yuan, while the dollar and the euro remained strong over the medium term fundamentals," said the IMF.
In addition, the Fund insisted on another risk to global growth, the swelling public debt of developed countries.
While advising maintain expansionary policies in 2010, he believes that "many of these countries must also take urgent credible medium-term strategies to reduce public debt and then back to more conservative levels ."The risks associated with foreign states may depress the activity for a variety of reasons," noted the IMF.
"The high ratios of debt (relative to GDP, ie) would hinder budgetary flexibility, lead to higher interest rates in the general economy, increase the vulnerability of economies budgetary difficulties, and compressing the growth," he listed.
Finally, the Fund has called on governments to "repair and reform the financial sector, to end the gaps in regulation, and to" support the creation of jobs and the unemployed, the unemployment rate to remain at around 8.5% in developed countries until the end of 2011.