Global economy likely to grow at 4.25 per cent in 2010 and 2011: IMF chief
29 May 2010
Global economic growth is expected to accelerate to around 4.25 per cent this year and next, International Monetary Fund (IMF) managing director Dominique Strauss-Kahn said on Friday.
"We now expect global growth to hit 4.25 per cent in 2010 and 2011, faster than previously expected. But it is still fragile," Kahn said while addressing a meeting of officials from finance ministries in Latin America and the Caribbean.
Kahn said while the global economy has come a long way since the onset of the global financial crisis, recovery is proceeding at different speeds, with downside risks in advanced economies still remaining. Reducing fiscal vulnerabilities of advanced economies was crucial to lasting recovery, he said.
"Markets have been unsettled by the significant fiscal consolidation challenges faced by some countries. The world is still a dangerous place, as downside risks still dominate and tail risks remain ever-present. Events in Europe only reinforce this message," Kahn said.
Recovery in advanced countries is still lukewarm, given the high unemployment, lasting damage to banking systems, and weak financial positions of households, he said.
"Here, the recovery will be more sluggish than in the past, as repairing the damage will take time," Kahn said.