News / Economy

IMF Raises 2010 Growth Forecast, Developing Economies Lead the Way

TEXT SIZE - +
William Ide

The International Monetary Fund says the global economy will grow at a faster-than-expected rate this year as it continues to rebound from a crippling financial crisis.  The Washington-based international lending agency says the emerging markets of Brazil, China and India will help lead the global rebound.  

In its latest World Economic Outlook report, the International Monetary Fund forecasts global economic growth of 4.2 percent for this year.  Its forecast for growth in 2011 remained at 4.3 percent, unchanged from its last forecast in January.

IMF chief economist Olivier Blanchard says the world economy is at an important stage of its efforts to rebound from the global financial crisis.

"A global depression has been averted," said Olivier Blanchard. "The world economy is recovering, and recovering better than we had previously thought likely.  This is certainly welcome news."

Blanchard notes that emerging economies are leading the way in helping boost world economic growth.  Asia is forecast to see the strongest growth this year at 8.7 percent.

The International Monetary Fund says many economies have resumed a high rate of growth, but challenges remain.  Among advanced economies, the United States is expected to outperform Europe and Japan, but it will lag behind China and other developing nations.

IMF chief economist Blanchard:

"In the U.S., consumers, who were the drivers of the economy before the crisis are being more prudent," he said. "In Europe, where banks play a central role in financial intermediation, the weak banking sector limits credit supply.  In Japan, deflation has re-appeared, leading to higher interest rates and putting in danger an already weak recovery."

China is expected to grow by 10 percent this year, and India by 8.8 percent.  The U.S. economy is forecast to grow by 3.1 percent.

The International Monetary Fund says growth for the 16 European countries that share the euro currency will be one percent in 2010.

Blanchard says despite the good news, achieving strong sustained and balanced growth for the global economy will not be easy.

"It will require more work, namely fiscal consolidation in advanced countries, exchange rate adjustments, rebalancing of demand across the world, these are the tasks facing policymakers over the next few years," said Blanchard.

Fiscal consolidation refers to the use of policy to reduce government deficits and debt.

The IMF report warned the failure of nations to contain soaring public debt could have severe consequences on the global economy.

Blanchard says the solution to the challenges facing emerging and advanced economies lies in the adjustment of their exchange rates.  He says that as advanced economies work to deal with debt and deficit, which would have a negative impact on growth, they may need to let their currencies depreciate to help increase exports and hence growth.

He says emerging countries need to do the opposite, let their currencies appreciate and reduce exports.  Blanchard says that it is in their interest to do so because global growth will help support the growth of their economies.

"In China, for example, a shift away from exports, towards domestic consumption, a shift that requires both structural measures to decrease savings, and an appreciation of the currency, appears highly desirable," he said.

China has been under increasing pressure from the United States and other countries to let its currency, the yuan, strengthen so global products can be more competitive against Chinese exports.

The new IMF forecast for global economic growth was issued just before a key meeting of global financial leaders this week in Washington.

On Friday, global financial leaders will hold day-long talks with the Group of 20 nations, a bloc that includes the world's richest industrial nations as well developing nations such as Brazil, China, India and Russia.

The talks on Friday, as well as meetings on Saturday and Sunday, are expected to focus on efforts to overhaul financial regulatory systems, rebalance global growth and ways to make the recovery more sustainable.   

You May Like

Wikipedia Proves Useful for Tracking Flu

Technique gave better results than Center for Disease Control (CDC) and Google’s Flu Trends More

Turkish Law Gives Spy Agency Controversial Powers

Parliament approves legislation to bolster powers of intelligence service, which government claims is necessary to modernize and deal with new threats Turkey faces More

Video Face of American Farmer Changing

Average American farmer is now 58 years old, and farmers 65 and older are the fastest growing segment of the population 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.
Face of American Farmer is Changingi
X
Mike Osborne
April 18, 2014
The average American farmer is now 58 years old, and farmers 65 and older are the fastest growing segment of the population. It’s a troubling trend signaling big changes ahead for American agriculture as aging farmers retire. Reporter Mike Osborne says a new report from the U.S. Census Bureau is suggesting what some of those changes might look like... and why they might not be so troubling.
Video

Video Face of American Farmer is Changing

The average American farmer is now 58 years old, and farmers 65 and older are the fastest growing segment of the population. It’s a troubling trend signaling big changes ahead for American agriculture as aging farmers retire. Reporter Mike Osborne says a new report from the U.S. Census Bureau is suggesting what some of those changes might look like... and why they might not be so troubling.
Video

Video Donetsk Governor: Ukraine Military Assault 'Delicate But Necessary'

Around a dozen state buildings in eastern Ukraine remain in the hands of pro-Russian protesters who are demanding a referendum on self-rule. The governor of the whole Donetsk region is among those forced out by the protesters. He spoke to VOA's Henry Ridgwell from his temporary new office in Donetsk city.
Video

Video Drones May Soon Send Data From High Seas

Drones are usually associated with unmanned flying vehicles, but autonomous watercraft are also becoming useful tools for jobs ranging from scientific exploration to law enforcement to searching for a missing airliner in the Indian Ocean. VOA’s George Putic reports on sea-faring drones.
Video

Video New Earth-Size Planet Found

Not too big, not too small. Not too hot, not too cold. A newly discovered planet looks just right for life as we know it, according to an international group of astronomers. VOA’s Steve Baragona has more.
Video

Video Copts in Diaspora Worry About Future in Egypt

Around 10 percent of Egypt’s population belong to the Coptic faith, making them the largest Christian minority in the Middle East. But they have become targets of violence since the revolution three years ago. With elections scheduled for May and the struggle between the Egyptian military and Islamists continuing, many Copts abroad are deeply worried about the future of their ancient church. VOA religion correspondent Jerome Socolovsky visited a Coptic church outside Washington DC.
Video

Video Critics Say Venezuelan Protests Test Limits of Military's Support

During the two months of deadly anti-government protests that have rocked the oil-rich nation of Venezuela, President Nicolas Maduro has accused the opposition of trying to initiate a coup. Though a small number of military officers have been arrested for allegedly plotting against the government, VOA’s Brian Padden reports the leadership of the armed forces continues to support the president, at least for now.
Video

Video More Millenials Unplug to Embrace Board Games

A big new trend in the U.S. toy industry has more consumers switching off their high-tech gadgets to play with classic toys, like board games. This is especially true among the so-called millenial generation - those born in the 1980's and 90's. Elizabeth Lee has more from an unusual café in Los Angeles, where the new trend is popular and business is booming.
Video

Video Google Buys Drone Company

In its latest purchase of high-tech companies, Google has acquired a manufacturer of solar-powered drones that can stay in the air almost indefinitely, relaying broadband Internet connection to remote areas. It is seen as yet another step in the U.S. based Web giant’s bid to bring Internet to the whole world. VOA’s George Putic reports.
AppleAndroid

World Currencies

EUR
USD
0.7217
JPY
USD
102.17
GBP
USD
0.5949
CAD
USD
1.1009
INR
USD
60.326

Rates may not be current.