Posted on 10:36 PM, January 10, 2010
World recovery not assured, say WTO, IMF execs
PARIS/WARSAW -- The world economy may not emerge out of crisis in 2010 due to "bubbles" created by the huge injections of money used to keep the financial system operating, World Trade Organization (WTO) chief Pascal Lamy said Friday.
In Warsaw, meanwhile, the International Monetary Fund’s (IMF) head for Europe said global economic recovery was faster and stronger than expected but there were still risks for its sustainability.
"You have to be realistic, it is not guaranteed," the WTO director general said on French radio when asked whether the world economy would recover in 2010.
"There is no doubt we have reached the bottom of the pool but the speed at which we are coming up again is not clear. In flooding the economic and financial system with public money we have also created bubbles which will have to be absorbed," Mr. Lamy told France Culture radio.
In an interview with Gazeta Wyborcza daily, meanwhile, the IMF’s Marek Belka said the economic recovery was mostly driven by state programs and that its was not certain to continue after the aid is phased out.
"[The global] situation is better than a year ago. The recovery has happened sooner than we had expected and it is stronger, but... we owe it for now mostly to state aid," he said.
"The IMF is concerned whether the growth in demand caused by helping economy by a state proves durable," Mr. Belka also said.
He said problems would likely occur first in countries where households were excessively in debt, like Germany and France.
"We don’t expect 2010 to be a year of crisis, but the recovery will be very slow," Mr. Belka added.
Governments around the world have spent trillions of dollars over the past 18 months avoiding the collapse of the financial system and then trying to claw away from recession.
The WTO chief highlighted the dynamism of the emerging economic powers -- China, Brazil, India and South Africa -- in avoiding the worst.
"These are the more dynamic, better run, less indebted countries ... These are the countries which are from a certain point of view better run than the western economies." -- AFP and Reuters
World recovery not assured, say WTO, IMF execs
PARIS/WARSAW -- The world economy may not emerge out of crisis in 2010 due to "bubbles" created by the huge injections of money used to keep the financial system operating, World Trade Organization (WTO) chief Pascal Lamy said Friday.
In Warsaw, meanwhile, the International Monetary Fund’s (IMF) head for Europe said global economic recovery was faster and stronger than expected but there were still risks for its sustainability.
"You have to be realistic, it is not guaranteed," the WTO director general said on French radio when asked whether the world economy would recover in 2010.
"There is no doubt we have reached the bottom of the pool but the speed at which we are coming up again is not clear. In flooding the economic and financial system with public money we have also created bubbles which will have to be absorbed," Mr. Lamy told France Culture radio.
In an interview with Gazeta Wyborcza daily, meanwhile, the IMF’s Marek Belka said the economic recovery was mostly driven by state programs and that its was not certain to continue after the aid is phased out.
"[The global] situation is better than a year ago. The recovery has happened sooner than we had expected and it is stronger, but... we owe it for now mostly to state aid," he said.
"The IMF is concerned whether the growth in demand caused by helping economy by a state proves durable," Mr. Belka also said.
He said problems would likely occur first in countries where households were excessively in debt, like Germany and France.
"We don’t expect 2010 to be a year of crisis, but the recovery will be very slow," Mr. Belka added.
Governments around the world have spent trillions of dollars over the past 18 months avoiding the collapse of the financial system and then trying to claw away from recession.
The WTO chief highlighted the dynamism of the emerging economic powers -- China, Brazil, India and South Africa -- in avoiding the worst.
"These are the more dynamic, better run, less indebted countries ... These are the countries which are from a certain point of view better run than the western economies." -- AFP and Reuters