Tuesday, 18 August 2009

Posted by Ghost Dog in Latest Breaking News
Tue Aug 18th 2009, 09:40 PM

Posted by Ghost Dog in Latest Breaking News
Tue Aug 18th 2009, 09:24 PM

Global recovery has started, says IMF - WASHINGTON: The global economic recovery has begun but sustaining it will require refocusing the United States toward exports and Asia toward imports, the International Monetary Fund’s chief economist said.

In an article released by the IMF on Tuesday, Olivier Blanchard also said potential economic output may be lower than it was before the financial crisis struck. “The turnaround will not be simple,” Blanchard said. “The crisis has left deep scars, which will affect both supply and demand for many years to come.”

He said US consumption, which accounts for about 70% of the US economy and a large chunk of global demand, would not quickly return to pre-crisis strength as households cope with trillions of dollars in losses from the falling housing and stock markets.

He said the financial crisis had made Americans more conscious of “tail risks” — events that are unlikely to occur, but when they do have devastating consequences. That means US consumers are unlikely to return to their free-spending ways, and both the United States and its trading partners will have to adjust. Emerging Asian countries, especially China, must play a big role.


“Both higher Chinese import demand and a higher (yuan) will increase US net exports,” he said.

/... http://economictimes.indiatimes.com/News/I...

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