Monday, March 19, 2012

Global economic growth to slow this year: IMF's Zhu

HONG KONG: Global economic growth will slow this year, though it is faring better with the United States looking much improved, the International Monetary Fund's deputy managing director Zhu Min said on Monday.

Speaking at the Credit Suisse Asian Investment Conference in Hong Kong, he said risks are still on the downside, with financial markets - particularly in the euro zone - remaining fragile.

Growth in emerging markets will be strong but may be weaker than expected as the full impact of the slowdown in developed economies has yet to fully filter through to them.

Zhu said a key challenge is to create strong economic growth in a deleveraging environment, and warned that global inflationary risks need to be monitored.

However, he expects the slowdown in emerging-market economies to stabilise over the next few months, with an improving US economy giving people confidence in the global recovery.

He said that the European financial markets "are still very fragile" and there is "no room for any mistake, any slip-up in the market".

As for China, Zhu said the country must rebalance its economy to encourage stronger domestic demand, and it must move into a more flexible exchange rate regime.

He said China's economic trends and policies were pointing to a soft landing for the country's economy.

Zhu was appointed to the newly created deputy managing director post at the IMF in July, in a move aimed at recognising China's growing power globally.

He added that Japan needs a fiscal plan to reduce on its debt levels, which he said are unsustainable. Nonetheless, he expects Japan to record "strong" economic growth this year.

- CNA/al

View the original article here

Source From Channel News Asia

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