World economy - IMF outlook
Glimmer of hope for world economy, says IMF
Article published on the 2009-10-01 Latest update 2009-10-01 13:08 TU
Dominique Strauss-Kahn
(Photo : AFP)
In a speech in Istanbul, Strauss-Kahn warned that the crisis is not over. Unemmployment will continue to rise, he said, and the financial sector still faces risks.
The IMF says that most economies will experience higher growth than previously expected. The global economy will shrink 1.1 percent this year, it believes, but then it will rebound to growth of 3.1 percent in 2010.
Advanced ecoonomies will be "sluggish", the review says, but at least they will have some growth.
But Strauss-Kahn said Thursday that there will be a gap between growth resuming and unemployment peakinng and it could as long as 14 months.
And he warned that the financial sector remains shaky and that countries may wind down economic stimulus programmes too early. The statement at this month's G20 summit in Pittsburgh indicated that governments are keen to cut back on the packages.
The IMF review predicts:
- China, India and other emerging Asian economies will be the motor for expansion, it says, as domestic stimulus measures spur demand. But Russia and other east European states face a "difficult path";
- The Middle East and Africa are expected to post solid growth of four per cent, helped largely be a predicted recovery in commodity prices;
- The US economy, the world's largest, is projected to grow 1.5 per cent in 2010, following a sharp 2.7 decline this year;
- In Europe a smaller rebound in expected. The IMF drops its prediction of 0.3 per cent decline for the 16-state eurozone in 2010 and now hopes for 0.3 per cent growth instead.
