29-Sep-2010 9:53 AM

Economic growth to slow in second half; risk from jobs: IMF

International Monetary Fund First Deputy Managing Director, John Lipsky, in a speech at the Depository Trust and Clearance Corporation Executive Forum commented (27-Sep-2010) that the IMF is anticipating a continued "moderate global recovery", driven by growth in emerging economies, but added that "growth has slowed in this year's second half" with this sluggishness to persist into early 2011. He continued: "The global expansion likely will fall somewhat short of the 3.75% annual rate that we had anticipated previously for the second half of this year." [more - Speech]

IMF Managing Director Dominique Strauss-Kahn stated that while the global economy is recovering at a sluggish pace, the recovery remains uncertain due to the risk that not enough jobs will be created to make the rebound secure (Associated Press, 29-Sep-2010). Mr Strauss-Kahn stated he is optimistic about the outlook for the US, adding that the IMF does not see the risk of a double-dip recession, adding that Asian and Latin American economies are doing well but prospects for some European countries remain uncertain, adding that some countries, particularly Ireland, Spain and Portugal "were not at the edge of a cliff but still have serious fiscal issues they have to address". Mr Strauss-Kahn added that he sees no major danger of an escalation of currency devaluations as countries seek to boost economic growth, commenting: “I don’t feel today there’s a big risk of a currency war, but that’s part of the downside risks.” (Bloomberg/AFP, 29-Sep-2010) He said Europe is over-represented on the IMF Board and should make room for emerging countries such as Turkey to help maintain the institution's legitimacy (Dow Jones, 29-Sep-2010).

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