The International Monetary Fund (IMF) has painted a more optimistic view of the global economy in its latest World Economic Outlook (WEO) and its Global Financial Stability Reports but officials say Latin America and Caribbean growth is still at pre-crisis levels.
“In 2010, world output is expected to rise by 4 percent,” the WEO report said, adding that this represents an upward revision of ¾ percentage point from the October 2009 World Economic Outlook.
But the Latam outlook was not as rosy.
“As of the third quarter, growth in Latin America was still below the pre crisis level so the recovery is proceeding not as fast as in Asia where it has already apprecialbly above ethe pre crisis level,” the Fund’s Jörg Decressin said Tuesday in response to an Abeng News query submitted during a Washington News conference at the IMF headquarters.
But Decressin, deputy director, Monetary and Capital Markets Departmentsaid he expects the regional situation to concolidate because domestic demand is fairly vigorous and demand from other countries in the world will also help support the recovery.
The fund’s Chief Economist Olivier Blanchard reported that a solid recovery is likely for Asia while the rest of the world recovers more slowly. He said while the best way to think about the recovery is still that it is policy-driven, it’s thought of as multi-speed because different parts of the world are doing very differently.
“In the major advanced countries, the recovery is there, but it’s weak,” said Blanchard. Meanwhile, the major emerging markets are doing extremely well – such as China, India and Indonesia.”
In his analysis of the Global Financial Stability Report, José Viñals, financial counsellor and director, Monetary and Capital Markets Department said that while financial stability is improving, further losses may need to be absorbed in advanced economies, emerging nations must cope with massive capital inflows, and nations will need strategies to deal with rising public debt.
The WEO proposes that in advanced and emerging economies with excessive external surpluses and domestic saving rates, global rebalancing could be fostered through structural policies to support domestic demand and the development of nontradable sectors.
China is projected to have the biggest percentage growth at 10 per cent in 2010 and 9.7 percent in 2011, followed by India at 7.7 and 7.8, although that is exceeded by what is designated as “Developing Asia” where the projection is 8.4 per cent each year.
The United States is expected to post 2.7 per cent growth in 2010 and 2.4 per cent in 2011.
[flashvideo file=http://www.abengnews.com/wp-content/uploads/2010/01/Jorg_Decressin.flv image=http://www.abengnews.com/wp-content/uploads/2010/01/Jorg_Decressin320.jpg /]
About Mark Lee
Editor, author and writer with career spanning print, radio, television and new media.