Open

Coming up

Don't miss

Replay


LATEST SHOWS

FASHION

Paris, Haute Couture Fall/Winter 2014-2015.

Read more

REPORTERS

Exclusive: an unlikely victim of the 'War on Terror'

Read more

AFRICA NEWS

2014-07-11 21:47 AFRICA NEWS

Read more

MEDIAWATCH

Finally, a good use for new app "Yo"

Read more

THE WORLD THIS WEEK

The World This Week - 11 July 2014 (part 2)

Read more

THE WORLD THIS WEEK

The World This Week - 11 July 2014

Read more

#THE 51%

Sweden: A Feminist's Paradise?

Read more

FRANCE IN FOCUS

Politics: parties under pressure

Read more

FOCUS

In Burma, the rise of radical Buddhism

Read more

  • Israeli special forces attack Hamas base inside Gaza Strip

    Read more

  • Iraqi parliament resumes session on key appointments

    Read more

  • Holland beat hosts Brazil 3-0 to finish third in World Cup

    Read more

  • Afghan presidential candidates agree to full vote audit, Kerry says

    Read more

  • Germany vs Argentina - history and genius clash in World Cup final

    Read more

  • Legal challenge to French mayor’s ban of Muslim hijab on beach

    Read more

  • France’s Kadri wins eighth stage at Tour de France

    Read more

  • Last of the Ramones, Tommy Ramone, dies aged 62

    Read more

  • Video: Outrage in wake of deadly Casablanca buildings collapse

    Read more

  • Iraqi forces ‘executed prisoners in reprisal’ for ISIS killings

    Read more

  • Ukraine promises retaliation after rebel assault

    Read more

  • Putin revives old Cuban flame and eyes Latin American minerals

    Read more

  • Amazon snubs French free delivery ban with one-cent charge

    Read more

  • Cleveland's NBA fans hail 'return of king' LeBron James

    Read more

  • Exclusive: an unlikely victim of the 'War on Terror'

    Read more

Business

Global recovery has begun, says IMF's chief economist

©

Text by NEWS WIRES

Latest update : 2009-08-18

The International Monetary Fund's chief economist, Olivier Blanchard, said that the global recovery from recession has begun but countries will need to rebalance their economies to make sure it is sustainable.

Reuters - 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 U.S. consumption, which accounts for about 70 percent of the U.S. 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 U.S. 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.

 

"From the point of view of the United States, a decrease in China's current account surplus would help increase demand and sustain the U.S. recovery," he said. "That would result in more U.S. imports which would help sustain world recovery."

 

But in order for China to boost domestic demand, it will need to provide a stronger social safety net and increase household access to credit, which will encourage its consumers to save less and spend more.

 

"Both higher Chinese import demand and a higher (yuan) will increase U.S. net exports," he said.

Date created : 2009-08-18

Comments

COMMENT(S)