News / Economy

IMF Raises 2010 Growth Forecast, Developing Economies Lead the Way

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

Video In Ukraine's Nikishino, No House Untouched by Fighting

Ninety percent of homes in one small village were damaged or destroyed as government forces failed to stop a rebel advance More

Pakistan’s 'Last Self-Declared Jew' Attacked, Detained

Argument about the rights of non-Muslims in Pakistan allegedly results in mob beating well-known Jewish Pakistani More

Turkey Cracks Down on Political Dissent, Again

People daring to engage in political dissent ahead of upcoming general elections could find themselves in jail 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.
In Their Own Words: Citizens of Kobanii
X
Mahmoud Bali
March 06, 2015 8:43 PM
Civilians are slowly returning to Kobani, after Kurdish fighters backed by coalition airstrikes fought off a four-month siege of the northern Syrian town by Islamic State militants. VOA Kurdish Service reporter Mahmoud Bali talked to some of those who have returned. We hear about the devastation of Kobani through their own words.
Video

Video In Their Own Words: Citizens of Kobani

Civilians are slowly returning to Kobani, after Kurdish fighters backed by coalition airstrikes fought off a four-month siege of the northern Syrian town by Islamic State militants. VOA Kurdish Service reporter Mahmoud Bali talked to some of those who have returned. We hear about the devastation of Kobani through their own words.
Video

Video In Ukraine's Nikishino, No House Untouched by Fighting

In the village of Nikishino, in eastern Ukraine, recent fighting has brought utter devastation. Ninety percent of the houses are damaged or destroyed after government forces tried and failed to stop rebels advancing on the strategically important town of Debaltseve nearby. Patrick Wells reports for VOA from Nikishino.
Video

Video Crime Scenes Re-Created in 3-D Visualization

Police and prosecutors sometimes resort to re-creations of crime scenes in order to better understand the interaction of all participants in complicated cases. A Swiss institute says advanced virtual reality technology can be used for quality re-creations of events at the moment of the crime. VOA’s George Putic reports.
Video

Video Sierra Leone Ebola Orphans Face Another Crisis

There's growing concern about the future of an orphanage run by a British charity in Sierra Leone, after a staff member and his wife died this week from Ebola. The Saint George Foundation Orphanage in Freetown is now in quarantine, with more than 20 children and seven staff in lock-down. The BBC has agreed to share Ebola-related material with Voice of America because of the difficulties faced by media organizations reporting the crisis. Clive Myrie reports from Sierra Leone.
Video

Video Growing Concerns Over Whether Myanmar’s Next Elections Will Be Fair

Myanmar has scheduled national elections for November that are also expected to include a landmark referendum on the country's constitution. But there are growing concerns over whether the government is taking the necessary steps to prepare for a free and fair vote. VOA Correspondent Steve Herman was recently in Myanmar and files this report from our Southeast Asia bureau in Bangkok.
Video

Video Nigeria’s Ogonis Divided Over Resuming Oil Production

More than two decades ago, Nigeria’s Ogoni people forced Shell oil company to cease drilling on their land, saying it was polluting the environment. Now, some Ogonis say it’s time for the oil to flow once again. Chris Stein reports from Kegbara Dere, Nigeria.
Video

Video Fuel Shortages in Nigeria Threaten Election Campaigns

Nigeria is suffering a gas shortage as the falling oil price has affected the country’s ability to import and distribute refined fuels. Coming just weeks before scheduled March 28 elections, the shortage could have a big impact on the campaign, as Henry Ridgwell reports for VOA.
Video

Video Report: Human Rights in Annexed Crimea Deteriorating

A new report by Freedom House and the Atlantic Council of the United States says the human rights situation in Crimea has deteriorated since the peninsula was annexed by Russia in March of last year. The report says the new authorities in Crimea are discriminating against minorities, suppressing freedom of expression, and forcing residents to assume Russian citizenship or leave. Zlatica Hoke has more.
Video

Video 50 Years Later African-Americans See New Voting Rights Battles Ahead

Thousands of people will gather to mark the 50th anniversary of a historic civil rights march on March 7th in Selma, Alabama. In 1965, dozens of people were seriously injured during the event known as “Bloody Sunday,” after police attacked African-American demonstrators demanding voting rights. VOA’s Chris Simkins introduces us to some civil rights pioneers who are still fighting for voting rights in Alabama more than 50 years later.
Video

Video Craft Brewers Taking Hold in US Beer Market

Since the 1950’s, the U.S. beer industry has been dominated by a handful of huge breweries. But in recent years, the rapid rise of small craft breweries has changed the American market and, arguably, the way people drink beer. VOA’s Jeff Custer reports.
Video

Video Video Claims to Show Shia Forces in Iraq Executing Sunni Boy

A graphic mobile phone video is spreading on the Internet, claiming to show Iraqi forces or Shia militia executing a handcuffed Sunni boy. Experts have yet to verify the video, but already Islamic State followers are publicizing it across social media, playing on deep-rooted sectarian fears. VOA’s Jeff Seldin reports.
Video

Video Ukrainian Authorities Struggle to Secure a Divided Mariupol

Since last month's cease-fire went into effect, shelling around the port city of Mariupol has decreased, but it is thought pro-Russian separatists remain poised to attack. For the city’s authorities, a major challenge is gaining the trust of residents, while at the same time rooting out informants who are passing sensitive information to the rebels. Patrick Wells reports for VOA.

All About America

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More

World Currencies

EUR
USD
0.9121
JPY
USD
119.93
GBP
USD
0.6585
CAD
USD
1.2465
INR
USD
62.397

Rates may not be current.