World economy recovering with unbalanced pace, coordination critical: IMF chief economist
Wednesday, October 06, 2021 3:56 PM

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WASHINGTON, Oct. 6, 2010 (Xinhua News Agency) -- While the global economy is making a comeback, it is doing so at an uneven pace, as developed nations slog their way out of the recession and emerging economies are seeing more rapid growth, Olivier Blanchard, chief economist of the International Monetary Fund (IMF), told reporters on Wednesday.

"The world economic recovery is proceeding. But it is a geographically unbalanced recovery, sluggish in advanced countries, and much stronger in emerging and developing countries," he noted.

For advanced countries, growth will be low, at 2.7 percent for 2010 and 2.2 percent for 2011. As such, unemployment in the United States is forecast to remain high, at 9.6 percent in 2011. For the Euro area, it is expected to linger at 10 percent, Blanchard said during one IMF press conference in Washington.

For emerging economies, consumption and investment is contributing to strong growth. Growth for these nations as a whole is forecast to reach 7.1 percent in 2010 and 6.4 percent for 2011, he said.

Emerging Asian nations as a whole are forecast to reach 9.4 percent this year and 8.4 percent next year, he said.

"In most advanced economies, consumption and parts of investment are still weak," Blanchard said. "And (they) will remain so for some time. By contrast, in most emerging economies, consumption and investment are much stronger."

Governments must also enact both financial repairs and reforms. While these reforms are proceeding, questions remain over issues such as "too big to fail" institutions -- those banks and other financial organizations whose collapse could severely damage the economy.

Governments must also address financial consolidation wherever it is needed, he said.

"The need for careful design at the national level, and a collaborative action at the global level may be even more important today than they were at the peak of the crisis," he said.

In response to a question from Xinhua, Blanchard stressed the importance of global collaboration in coping with global economic challenges.

"The main challenge for advanced economies is fiscal consolidation. But there is going to be reluctance to achieve it if the growth is weak, as they need to rely more on exports, like the United States," he said, adding that various countries should enhance coordination on economic and trade issues to avoid a possible "currency war."

The world economy, led by emerging markets and developing countries, is forecast to grow by 4.8 percent in 2010 before falling back to 4.2 percent next year, but a sharper global slowdown is unlikely, the IMF said in its latest World Economic Outlook report.

 

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