Published April 20, 2010
IMF to raise global growth forecast for '10
It also sees China moving on currency policy at some point
(TOKYO) The International Monetary Fund (IMF) will raise its forecast for global growth this year to 4 per cent or more as China and emerging economies pick up pace, the Nikkei newspaper quoted the head of the fund as saying.
South America and Africa are also clearly recovering, but private demand in the United States, Japan and Europe remains weak, IMF managing director Dominique Strauss-Kahn told the paper.
Mr Strauss-Kahn was also quoted as saying he expects China to move on currency policy at some point, as the yuan is undervalued and allowing the currency to rise would benefit China.
The IMF sharply raised its estimates in January, predicting that the world economy would expand by 3.9 per cent in 2010, much higher than the 3.1 per cent it projected last October, with the pace picking up to 4.3 per cent next year. His comments came as the IMF and the World Bank are scheduled to hold the April 22-25 meetings of global finance chiefs.
The leaders face fractious talks on how to shift more voting power at the World Bank to emerging economic heavyweights such as China, a prelude to a bigger fight over the IMF.
The Group of 20 (G-20) major developed and developing countries is pressing for an agreement on voting power at the World Bank at this week's meeting to coincide with the larger capital increase for the institution. The shift in power at the IMF will be decided early next year.
World Bank president Robert Zoellick also told Reuters that plans were coming together for a US$3.5 billion capital increase at the institution - its first in more than 20 years - with funds coming from rich countries and newly emerging powers.
That would help the bank restore its firepower after lending heavily during the financial crisis to help developing countries cope with the plunge in global demand and steep decline in private capital flows.
Shifting voting power in the bank, which would generate a further US$1 billion in new capital, is politically thorny because it means countries especially in Europe have to give up some of their voting power to developing countries.
Britain, one of the bank's largest contributors, is in the midst of a national election and there are concerns it may not be able to take a position until after the ballot on May 6. Even Nordic countries, traditionally generous with development aid, are reluctant to accept less voting power.
G-20 leaders agreed at meetings in Pittsburgh last year to a 3 per cent shift in overall voting power in the World Bank and at least 5 per cent for the IMF.
Emerging economies, which have pushed for a 6 per cent shift in voting power at the World Bank, expressed concern that even 3 per cent could be a tough sell. -- Reuters
IMF to raise global growth forecast for '10
It also sees China moving on currency policy at some point
(TOKYO) The International Monetary Fund (IMF) will raise its forecast for global growth this year to 4 per cent or more as China and emerging economies pick up pace, the Nikkei newspaper quoted the head of the fund as saying.
South America and Africa are also clearly recovering, but private demand in the United States, Japan and Europe remains weak, IMF managing director Dominique Strauss-Kahn told the paper.
Mr Strauss-Kahn was also quoted as saying he expects China to move on currency policy at some point, as the yuan is undervalued and allowing the currency to rise would benefit China.
The IMF sharply raised its estimates in January, predicting that the world economy would expand by 3.9 per cent in 2010, much higher than the 3.1 per cent it projected last October, with the pace picking up to 4.3 per cent next year. His comments came as the IMF and the World Bank are scheduled to hold the April 22-25 meetings of global finance chiefs.
The leaders face fractious talks on how to shift more voting power at the World Bank to emerging economic heavyweights such as China, a prelude to a bigger fight over the IMF.
The Group of 20 (G-20) major developed and developing countries is pressing for an agreement on voting power at the World Bank at this week's meeting to coincide with the larger capital increase for the institution. The shift in power at the IMF will be decided early next year.
World Bank president Robert Zoellick also told Reuters that plans were coming together for a US$3.5 billion capital increase at the institution - its first in more than 20 years - with funds coming from rich countries and newly emerging powers.
That would help the bank restore its firepower after lending heavily during the financial crisis to help developing countries cope with the plunge in global demand and steep decline in private capital flows.
Shifting voting power in the bank, which would generate a further US$1 billion in new capital, is politically thorny because it means countries especially in Europe have to give up some of their voting power to developing countries.
Britain, one of the bank's largest contributors, is in the midst of a national election and there are concerns it may not be able to take a position until after the ballot on May 6. Even Nordic countries, traditionally generous with development aid, are reluctant to accept less voting power.
G-20 leaders agreed at meetings in Pittsburgh last year to a 3 per cent shift in overall voting power in the World Bank and at least 5 per cent for the IMF.
Emerging economies, which have pushed for a 6 per cent shift in voting power at the World Bank, expressed concern that even 3 per cent could be a tough sell. -- Reuters