My comment: No comment. It is clear enough. Peace and best wishes.
Xi http://www.bloomberg.com/apps/news?pid=20601087&sid=a7K52bQpLFRA Oct. 1 (Bloomberg) -- The International Monetary Fund raised its forecast for global growth next year as more than $2 trillion in stimulus packages and demand in Asia pull the world economy out of its worst recession since World War II. The Washington-based IMF said the economy will expand 3.1 percent in 2010, more than a July forecast of 2.5 percent. China’s economy will grow 9 percent and India’s 6.4 percent. That compares with growth of 1.7 percent in Japan, 1.5 percent in the U.S. and 0.3 percent in the euro region. Days after President Barack Obama and other leaders declared that the Group of 20 is now the main forum for steering the global economy, the forecasts show emerging Asian nations powering the return to growth. The IMF, whose members are gathering in Istanbul for next week’s annual meeting, warned that the recovery would be “weak by historic standards” and said restoring banks to health remains a priority. “The global economy appears to be expanding again, pulled by the strong performance of Asian economies and stabilization or modest recovery elsewhere,” IMF said in its semi-annual World Economic Outlook. Still, the rebound will be “sluggish, credit constrained and, for quite some time, jobless.” European stocks gained, with the Dow Jones Stoxx 600 Index adding 0.5 percent to 243.74 at 8:20 a.m. in London. Crisis ‘Not Over’ The world economy will contract 1.1 percent this year, less than the 1.4 projected in July, the IMF said. So-called advanced economies including the U.S., Germany and Japan will lead the slump, shrinking 3.4 percent. As a bloc, emerging economies will expand 1.7 percent this year. “The recovery has started, meaning in most countries growth is coming back, nevertheless the crisis is not over,” IMF Managing Director Dominique Strauss-Kahn said at an event in Istanbul today. While a double-dip recession is “possible,” that is not the fund’s central scenario, he added. The IMF’s forecast for the global expansion in 2010 is below those from Deutsche Bank AG and JPMorgan Chase & Co., which anticipate growth of 3.5 percent and 3.4 percent respectively. Exit Challenge With the economy recovering, the key challenge for policy makers next year will be deciding when to start raising interest rates and unwinding emergency lending to banks, the IMF said. While a premature exit could pose a “significant” threat to the recovery, waiting too long could stoke asset bubbles in faster growing emerging economies. “It’s absolutely right to discuss the exit strategies, to prepare them, but it will be much too early to implement them,” Strauss-Kahn said in an interview last week. In the richest nations, conditions can remain accommodative for an “extended” period because inflation “is likely to remain subdued as long as output gaps remain wide,” the IMF said. In some emerging economies, conditions may need to be tightened earlier and more flexible exchange rates could help smooth the process. “Some of these economies are again seeing large asset- price increases in response to low interest rates, raising the danger of new asset- price bubbles,” the IMF said in the report. Other risks to the recovery include rising oil prices and a “virulent” return of the H1N1 flu, the IMF said. Stimulus Effect The world escaped the threat of spiraling into a prolonged slump this year after governments poured trillions into their economies. The Standard & Poor’s 500 Index has surged 56 percent since March, oil prices have doubled and house prices have started to recover in the U.S. and the U.K. Policy makers must nevertheless stay focused on making sure that the improvement in global credit markets and banking continues, the IMF said. It estimated yesterday that banks still have to announce a further $1.5 trillion in writedowns. While the recovery “is most evident in financial markets,” conditions are “still very difficult for borrowers,” the IMF noted. “There has been only very limited progress in removing impaired assets from bank balance sheets.” Emergency government measures have also lumbered them with soaring debt. The IMF said today that politicians must commit to “large reductions in deficits” once the recovery is secured and devise a post- crisis strategy to ensure confidence in fiscal solvency. China The anticipated rebound in China may nevertheless counter some of the recessionary pressures still in the global economy, according to the report. “The policy stimulus in China could support recoveries in other parts of Asia,” the IMF said. Kansai Paint Co., Japan’s largest paint maker, said on Sept. 18 it aims to boost profit by a third next year as demand for cars in Asia drives sales. Alcoa Inc. Chief Executive Officer Klaus Kleinfeld on Sept. 3 raised his 2009 forecast for global aluminum consumption because of demand triggered by China’s stimulus spending. Similarly, Brazil is expected to lead renewed expansion in Latin America, in part because of its increasing ties to Asia, the fund said. In the U.S., where the credit crisis started in 2007, the economy will grow next year at almost double the 0.8 percent rate foreseen three months ago after contracting 2.7 percent in 2009, the IMF said. Rising unemployment, likely to exceed 10.1 percent in the second half of next year, and the temporary nature of Obama’s $787 billion stimulus package, will restrain growth, the IMF said. Former Federal Reserve Chairman Alan Greenspan said yesterday he sees the U.S. economy slowing in the course of next year as the surge in stocks comes to an end. “That flattening out will put some sort of dull face on 2010,” Greenspan said in a Bloomberg Television interview. The 16-country euro region’s economy will shrink 4.2 percent this year, less than the 4.8 percent forecast in July, the IMF said. The forecast for 1.7 percent growth in Japan next year was unchanged from a July forecast. The 5.4 percent contraction the IMF predicted for Japan this year is 0.6 percentage point less than in July. --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "World-thread" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [email protected] For more options, visit this group at http://groups.google.com/group/world-thread?hl=en -~----------~----~----~----~------~----~------~--~---
