IMF sees gradual recovery of US economy
The Financial Express, August, 03, 2009, Page 18
Press Trust of India
Washington: The sharp fall in the economic output of the world’s largest economy, the United States seems to be ending but the recovery is likely to be gradual as there are still some financial strains, the International Monetary Fund said.
IMF in its annual report on the US said, “As a result of their increasingly strong and comprehensive policy measures, the sharp fall in economic output seems to be ending, and confidence in financial stability has strengthened.”
IMF has projected the real GDP for the United States for 2009 at negative 2.6%, and for the year 2010, it would improve significantly and was pegged at 0.8%.
However, as some financial strains are still round the corner, the recovery is likely to be gradual.
“With financial strains still elevated, the recovery is likely to be gradual, and risks are tilted to the downside,” the IMF report said.
The prospect in the job market, however, remains weak as the unemployment rate for United States is on an uptrend. The unemployment rate for US which was as low as 5.5% in 2004 is likely to touch 9.3% in 2009 and would further deteriorate to 10.1% in the year 2010, IMF added.
As per the IMF executive board assessment, policies under the Financial Stability Plan like-- stress tests, debt guarantees, and capital injections-- have contributed to a significant improvement in financial conditions.
However, incase the downside risks materialise, “Additional fiscal stimulus could also be used, although the immediate focus should be on implementing the current fiscal measures and monitoring their impact,” IMF said.
According to the report the macroeconomic policies are providing significant support to demand, but United States still has to wait for a complete economic recovery.
Interestingly, the IMF executive board has noted that the crisis will have important implications for the role of the United States in the global economy and emphasised on the fact that the other regions will need to play an increased role in supporting global growth.
“The US consumer is unlikely to play the role of global “buyer of last resort”, suggesting that other regions will need to play an increased role in supporting global growth,” they said. The report further said that “A key priority will be to develop comprehensive exit strategies to unwind the extraordinary crisis-driven interventions, once a sustainable recovery is underway.” The US economy has experienced the worst financial crisis since the Great Depression. In the second half of 2008, financial pressures intensified and came to a head with the failure of Lehman Brothers in September, which in turn triggered massive financial instability in the US and global financial markets.
The Financial Express, August, 03, 2009, Page 18
Press Trust of India
Washington: The sharp fall in the economic output of the world’s largest economy, the United States seems to be ending but the recovery is likely to be gradual as there are still some financial strains, the International Monetary Fund said.
IMF in its annual report on the US said, “As a result of their increasingly strong and comprehensive policy measures, the sharp fall in economic output seems to be ending, and confidence in financial stability has strengthened.”
IMF has projected the real GDP for the United States for 2009 at negative 2.6%, and for the year 2010, it would improve significantly and was pegged at 0.8%.
However, as some financial strains are still round the corner, the recovery is likely to be gradual.
“With financial strains still elevated, the recovery is likely to be gradual, and risks are tilted to the downside,” the IMF report said.
The prospect in the job market, however, remains weak as the unemployment rate for United States is on an uptrend. The unemployment rate for US which was as low as 5.5% in 2004 is likely to touch 9.3% in 2009 and would further deteriorate to 10.1% in the year 2010, IMF added.
As per the IMF executive board assessment, policies under the Financial Stability Plan like-- stress tests, debt guarantees, and capital injections-- have contributed to a significant improvement in financial conditions.
However, incase the downside risks materialise, “Additional fiscal stimulus could also be used, although the immediate focus should be on implementing the current fiscal measures and monitoring their impact,” IMF said.
According to the report the macroeconomic policies are providing significant support to demand, but United States still has to wait for a complete economic recovery.
Interestingly, the IMF executive board has noted that the crisis will have important implications for the role of the United States in the global economy and emphasised on the fact that the other regions will need to play an increased role in supporting global growth.
“The US consumer is unlikely to play the role of global “buyer of last resort”, suggesting that other regions will need to play an increased role in supporting global growth,” they said. The report further said that “A key priority will be to develop comprehensive exit strategies to unwind the extraordinary crisis-driven interventions, once a sustainable recovery is underway.” The US economy has experienced the worst financial crisis since the Great Depression. In the second half of 2008, financial pressures intensified and came to a head with the failure of Lehman Brothers in September, which in turn triggered massive financial instability in the US and global financial markets.
Posts
No comments:
Post a Comment