Sluggish recovery to linger into 2011: IMF
Washington, September 28, 2010
A slowing of the global economic recovery is likely to persist into early 2011, with evidence that world growth will drop below International Monetary Fund forecasts in the second half of this year, a senior fund official said.
"The global expansion likely will fall somewhat short of the 3.7 percent annual rate that we had anticipated previously for the second half of this year," IMF First Deputy Managing Director John Lipsky told the Depository Trust and Clearance Corp Executive Forum in a closed-door speech.
Global growth reached an annual rate of 4.7 percent in the first half of the year, he said.
The IMF is scheduled to release updated economic forecasts for the world next Wednesday. In July it projected 2010 global output would reach 4.6 percent and 4.3 percent in 2011.
"Our base case outlook is for a continued moderate global recovery," he said, adding that the slowing in the pace of the recovery would likely be temporary.
He said among risks to growth in advanced economies was the threat of renewed strains in sovereign debt markets, which could trigger a new round of pressures on banks.
"In this case, financial strains once again could spill over to the real economy," he added. Further weakness in property markets could cause similar strains, Lipsky added. - Reuters