IMF: Asia leads global recovery
The International Monetary Fund (IMF) has today warned that the global recovery “remains very fragile“.
Dominique Strauss-Kahn of the IMF said the global economy has been stronger than expected and China and developing Asian economies are leading the way in the global economic recovery but warned all major economies of an early withdrawal from stimulus packages.
He said stimulus measures have led to a recovery in many economies but added: “In most countries, growth is still supported by government policies. For as long as you do not have private demand strong enough to offset the need of public policy, you shouldn’t exit.”
He warned that early exit from fiscal measures could be severe as countries may not have the tools to deal with a renewed downturn after embarking on aggressive stimulus measures.
He believes that growth in the Chinese economy this year will be close to pre-recession levels.
Many analysts have described China’s recovery as “impressive” and the economy recently grew to 8.9% in the July to September period, up from 7.9% in the April to June period.
China recently overtook Germany as the world’s largest exporter, while car sales in China surpassed the US in 2009 and, as a result, became the world’s largest car and van market.
Meanwhile, the IMF is predicting global economic growth of 3.1% this year and suggested that it would raise its growth forecasts for this year.
Mr Strauss-Kahn also cautioned that a priority for many Governments is dealing with its huge levels of debt.
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