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Sat 27 Aug 2011 11:27 AM

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IMF says it does not see global recession looming

Senior International Monetary Fund official says risks have risen but does not expect recession

IMF says it does not see global recession looming

The IMF's updated
forecasts to be released next month do not foresee a global recession
but risks have risen, a senior International Monetary Fund official said
on Friday.

"I can say that our base case
is certainly not a recession," IMF first deputy managing director John
Lipsky told CNBC television. "There's no doubt however that risks have
risen given the weak performance in many economic data in the last few
months," he added.

Lipsky said rising risks to the global economy reflected a lack of confidence in policymakers' ability to rein in debts.

He
urged both the United States and Europe to develop credible medium-term
fiscal plans to boost confidence in their ability to cut their debt
levels.

"It is clear what is needed
is credible medium-term fiscal plans that will give confidence to
investors and others that the deficit will be controlled and fiscal
policy will be appropriate in the medium term," Lipsky said, speaking
from the U.S. Federal Reserve's annual retreat in Jackson Hole, Wyoming.

"The
more credible medium term planning, the more flexibility that will
exist with temporary impacts, such as potential impact of the hurricane
(Irene)," said Lipsky.

He said effective fiscal measures could include a combination of U.S. tax reforms and clear-cut spending plans.

The
White House said President Barack Obama and IMF chief Christine Lagarde
spoke by phone earlier on Friday and agreed that the world economy
needs further steps to boost growth in the short term.

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ahmed 9 years ago

with all due respect to the financial wizards within the IMF that we lesser mortals look up to.. can the IMF 'really' say they 'dont see a global recession looming'!!
were they able to forsee the recent ongoing one that hit us? and if so take corrective steps. its a plain simple 'no'.
with this in our minds...can we people really beleive all what such big world organizations state?