IMF Predicts
Developing Economies’ Rapid Recovery
The
International Monetary Fund (IMF) says developing and emerging
economies will recover faster from the global financial crisis
than the advanced economies.
The IMF said in its World Economic Outlook update, that the
recovery so far had been driven by policy and speed.
Change of recovery prospect
The organisation had, last year, said the global financial
crisis would heal faster in the advanced economies, while the
developing economies would continue to grapple with growth as
‘innocent victims’.
It said in the latest update that growth in developing and
emerging economies would rise to 6 per cent during the
year following a modest 2 per cent in 2009.
For the advanced economies, it predicts that output would expand
by 2 per cent during the year following a sharp decline
in output in 2009.
’’The new forecast reflects an upward revision of 3.4
percentage point. In 2011, growth was projected to edge up
further to 2.5 per cent….In spite of the revision, the recovery
in advanced economies is still expected to be weak by historical
standards, with real output remaining below its pre-crisis level
until late 2011.’’ The data showed
The IMF said high unemployment rates and public debt, as well as
not-fully-healed financial systems, and in some countries weak
household balance sheets, are presenting further challenges to
the recovery in some economies.
It said the 6 per cent growth forecast for developing and
emerging economies was an upward revision of almost 1 per
cent point, adding that in 2011, the output might accelerate
further.
The organisation further said that the financial conditions in
many economies had improved, with banks now less reliant on
central banks’ emergency facilities and government guarantees.
On capital markets, the IMF said equity markets had rebounded,
while corporate bond issuance had reached record levels, amid a
reopening of most high-yield markets.
According to the IMF, commodity prices, such as fuel, will rise
a bit further, supported by the strength of global demand,
especially from emerging economies while other non-fuel
commodity prices will rise modestly.
NAN/Yinka
