http://www.torontosun.com/money/2009.../10063561.html
IMF: World economy stabilizing
By CHRISTOPHER S. RUGABER, THE ASSOCIATED PRESS
Last Updated: 8th July 2009, 11:22am
WASHINGTON — The global economy is beginning a sluggish recovery from its worst recession since the Second World War, the International Monetary Fund said Wednesday.
Financial conditions have improved faster than it expected when it made its last global forecast in April, the fund said, largely due to government support for banks and other financial companies.
The IMF expects the world economy to shrink by 1.4% in 2009, slightly worse than its earlier estimate of 1.3%. But it boosted its estimate for global economic growth in 2010 to 2.5%, up from its April projection of 1.9%.
“The global recession is not over, and the recovery is still expected to be slow,” the IMF said in an update to its world economic outlook. Banks are still hampered by bad loans on their balance sheets, the fund said.
Advanced economies such as the United States, Europe and Japan aren’t expected to show sustained growth until the second half of next year.
Central banks that still have room to cut interest rates should do so, the IMF said, and governments should continue to stimulate their economies through 2010 with measures such as greater spending or tax cuts.
The IMF expects the U.S. economy to shrink by 2.6% this year, a slight improvement from its earlier estimate of a 2.8% decline and in line with many private forecasts.
The U.S. will grow 0.8% in 2010, the IMF said, up from its expectation of no growth in April.
Canada’s economy is expected to follow a similar pattern this year and next, although the 2009 decline will be slightly smaller and 2010 growth will be significantly stronger, the IMF said.
The fund estimates Canadian economic output will shrink 2.3% from 2008’s level, an improvement of 0.2 percentage point from the April analysis, while Canada’s growth in 2010 is projected at 1.6% (0.4 percentage point higher.)
China and India are also expected to grow faster than previously estimated, with China’s growth forecast at 7.5% this year and India’s economy to grow at a 5.4% pace.
The IMF provides loans and other assistance to troubled countries and has 185 member nations. It saw its influence decline earlier this decade as developing country economies boomed due to higher oil and other commodity prices.
But the worldwide recession has caused countries in Eastern Europe and elsewhere to turn to the fund for loans to support their crippled economies.
The Obama administration pledged $100 billion earlier this year to support an IMF emergency loan fund.
IMF: World economy stabilizing
By CHRISTOPHER S. RUGABER, THE ASSOCIATED PRESS
Last Updated: 8th July 2009, 11:22am
WASHINGTON — The global economy is beginning a sluggish recovery from its worst recession since the Second World War, the International Monetary Fund said Wednesday.
Financial conditions have improved faster than it expected when it made its last global forecast in April, the fund said, largely due to government support for banks and other financial companies.
The IMF expects the world economy to shrink by 1.4% in 2009, slightly worse than its earlier estimate of 1.3%. But it boosted its estimate for global economic growth in 2010 to 2.5%, up from its April projection of 1.9%.
“The global recession is not over, and the recovery is still expected to be slow,” the IMF said in an update to its world economic outlook. Banks are still hampered by bad loans on their balance sheets, the fund said.
Advanced economies such as the United States, Europe and Japan aren’t expected to show sustained growth until the second half of next year.
Central banks that still have room to cut interest rates should do so, the IMF said, and governments should continue to stimulate their economies through 2010 with measures such as greater spending or tax cuts.
The IMF expects the U.S. economy to shrink by 2.6% this year, a slight improvement from its earlier estimate of a 2.8% decline and in line with many private forecasts.
The U.S. will grow 0.8% in 2010, the IMF said, up from its expectation of no growth in April.
Canada’s economy is expected to follow a similar pattern this year and next, although the 2009 decline will be slightly smaller and 2010 growth will be significantly stronger, the IMF said.
The fund estimates Canadian economic output will shrink 2.3% from 2008’s level, an improvement of 0.2 percentage point from the April analysis, while Canada’s growth in 2010 is projected at 1.6% (0.4 percentage point higher.)
China and India are also expected to grow faster than previously estimated, with China’s growth forecast at 7.5% this year and India’s economy to grow at a 5.4% pace.
The IMF provides loans and other assistance to troubled countries and has 185 member nations. It saw its influence decline earlier this decade as developing country economies boomed due to higher oil and other commodity prices.
But the worldwide recession has caused countries in Eastern Europe and elsewhere to turn to the fund for loans to support their crippled economies.
The Obama administration pledged $100 billion earlier this year to support an IMF emergency loan fund.