News / Economy

IMF Says World Economy to Grow 4.8 Percent This Year

Olivier Blanchard, economic counselor of the International Monetary Fund, IMF, (FIle)
Olivier Blanchard, economic counselor of the International Monetary Fund, IMF, (FIle)

The International Monetary Fund says emerging nations are leading the recovery from the global financial crisis, while wealthy nations lag behind.  The IMF chief economist said some emerging nations need more market-oriented currency policies, while wealthy nations need to cut budget deficits.

International Monetary Fund officials say the world economy will expand 4.8 percent this year and slow down a bit next year.  Emerging nation economies will expand a bit more than seven percent this year, while developed nations can expect to grow just 2.7 percent.

Although the global recovery is uneven and fragile, IMF chief economist Olivier Blanchard says the world is not likely to lapse back into recession.  But he urged policy-makers in advanced and emerging nations to take tough actions.

Market-oriented currency policies

Blanchard told emerging nations with large trade surpluses that it will help their economies to change policies that rely heavily on exports, and do more to boost domestic demand.

China is one such nation, and allowing a more market-oriented exchange rate for China's currency could boost domestic demand by making imported goods more affordable to Chinese consumers.

Blanchard said current policies distort economic forces and hurt the quality of life in the country. "We see distortions, which led to too low a level of consumption, or too low a level of investment, and are decreasing welfare.  Removing these distortions, and thus allowing investment to increase is highly desirable from the point of view of the country," he said.

Budget deficits

Blanchard also had a stern message for wealthy developed nations, saying they must do more to cut budget deficits.  Worries about whether or not governments in Greece and other European nations can repay their debts have worried lenders and investors.

Those budget deficits grow in part from efforts to stimulate the economy and recover from the deep recession.  Blanchard said it is not yet time to stop supporting the economy, but it is necessary for governments to show that they have a clear path out of debt.

"What is essential here is not so much to phase out fiscal stimulus now, but to offer a credible, medium-term plan for debt stabilization and eventually, debt reduction," said the economist.

Blanchard also urged faster and stronger action to reform the financial system.

Severe problems in banks and other major financial firms were a major reason for the financial crisis.  Reform efforts include proposals to make banks keep larger reserves, and finding orderly ways to cope with the failure of financial firms that are so large their failure could hurt the entire economy.

See related report by Mil Arcega:

You May Like

N. Korea Sentences American to 6 Years Hard Labor

Matthew Miller's brief trial Sunday comes two weeks after 24-year old Miller and two other American detainees appealed to the US government to help free them More

Pakistan Rejects Afghan Criticism of 480-kilometer Border Trench

Military spokesman tells VOA the project is part of administrative and security measures taken to secure the mountainous border with Afghanistan More

Photogallery Typhoon Kalmaegi Makes Landfall in Philippines

Storm makes landfall late Sunday, cutting power and communications lines and forcing people to flee to higher ground More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Scotland Independence Bid Stokes Global Interesti
X
Henry Ridgwell
September 12, 2014 8:35 PM
The people of Scotland are preparing to vote on whether to become independent and break away from the rest of Britain, in a referendum being watched carefully in many other countries. Some see it as a risky experiment; while others hope a successful vote for independence might energize their own separatist demands. Foreign immigrants to Scotland have a front row seat for the vote. VOA’s Henry Ridgwell spoke to some of them in Edinburgh.
Video

Video Scotland Independence Bid Stokes Global Interest

The people of Scotland are preparing to vote on whether to become independent and break away from the rest of Britain, in a referendum being watched carefully in many other countries. Some see it as a risky experiment; while others hope a successful vote for independence might energize their own separatist demands. Foreign immigrants to Scotland have a front row seat for the vote. VOA’s Henry Ridgwell spoke to some of them in Edinburgh.
Video

Video Washington DC Mural Artists Help Beautify City

Like many cities, Washington has a graffiti problem. Buildings and homes, especially in low-income neighborhoods, are often targets of illegal artwork. But as we hear from VOA’s Julie Taboh, officials in the nation's capital have come up with an innovative program that uses the talents of local artists to beautify the city.
Video

Video Palestinians Turn to Rebuilding Gaza

After almost two months of conflict in Gaza, Palestinians are preparing to rebuild the isolated Mediterranean enclave with assistance from abroad. Meanwhile, an international human rights group has found that Israel likely violated international laws of war during some of its attacks on Gaza. Zlatica Hoke has more.
Video

Video US Muslim Leaders Condemn Islamic State

Leaders of America's Muslim community are condemning the violent extremism of the Islamic State group in Iraq and Syria. The U.S. Muslim leaders say militants are exploiting their faith in a failed effort to justify violent extremism. VOA correspondent Meredith Buel reports.
Video

Video Middle Eastern Church Leaders Highlight Christians’ Plight

Patriarchs of Eastern Rite churches came to Washington this week to draw attention to the attacks against Christians in Syria, Iraq and elsewhere in the Middle East. VOA’s religion correspondent Jerome Socolovsky has more.
Video

Video Americans' Reaction Mixed on Obama Strategy for Islamic State Militants

President Barack Obama’s televised speech on how the United States plans to “degrade and destroy” the group known as the Islamic State reached a prime-time audience of millions. And it came as Americans appear more willing to embrace a bolder, tougher approach to foreign policy. VOA producer Katherine Gypson and reporter Jeff Seldin have this report from Washington.
Video

Video Authorities Allege LA Fashion Industry-Cartel Ties

U.S. officials say they have broken up crime rings that funneled tens of millions of dollars from Mexican drug cartels through fashion businesses in Los Angeles. Mike O'Sullivan reports that authorities announced nine arrests, as 1,000 law enforcement agents fanned out through the city on Wednesday.
Video

Video Bedouin Woman Runs Successful Business in Palestinian City

A Bedouin woman is breaking social taboos by running a successful vacation resort in the Palestinian town of Jericho. Bedouins are a sub-group of Arabs known for their semi-nomadic lifestyle. Zlatica Hoke says the resort in the West Bank's Jordan Valley is a model of success for women in the region.


Carnage and mayhem are part of daily life in northern Nigeria, the result of a terror campaign by the Islamist group Boko Haram. Fears are growing that Nigeria’s government may not know how to counter it, and may be making things worse. More

AppleAndroid

World Currencies

EUR
USD
0.7735
JPY
USD
107.03
GBP
USD
0.6155
CAD
USD
1.1011
INR
USD
60.954

Rates may not be current.