Global economies facing uneven recovery: Lagarde
Global economies facing uneven recovery: Lagarde
Updated on Thursday, July 07, 2011, 00:33

Washington: Observing that countries like India and China are growing at a much faster pace than the advanced economies, the new IMF Managing Director Christine Lagarde Wednesday said the global economy is turnaround is uneven.

She said the world has clearly gone over the financial crisis that hit all economies, and particularly the advanced economies, in the fall of 2008 and continued well into 2009, in some countries well into 2010.

"Some might argue that it is continuing, given that the growth potential has not been restored in many countries, given the fact that unemployment is still very high... and therefore a lot needs to be done by the economic players," Lagarde said at a crowded press conference on her first day after taking over as IMF head.

She said the recovery has taken its course and going by growth forecast for 2011, 2012, "we are clearly on the rebound and things are improving and are getting better", since the height of the crisis in 2009.

"But that recovery is, as people will say, as you will comment on, uneven. If the growth forecast is in the range of 4.5 percent looking ahead, it`s clearly unbalanced in the sense that advanced economies are more in the range of 2.5 percent, whereas emerging markets are more in the range of 6.5, with some of them, such as India and China, hitting much higher marks," she added.

Hence, Lagarde said the world is facing a turnaround which is very uneven, with not those that were historically leading the charge, and "advanced economies that are lagging behind in a way given their status of development."

As such, she said, the challenges being faced by these countries are different.

"We have, clearly, in each of those two categories, different issues to address, and where clearly the fund can provide service, can provide guidance, can provide advice and recommendations and, if and when necessary and if asked, obviously, support," Lagarde said.

"And those two categories are, on the one hand, the issues of sovereign debt -- and that concerns all advanced economies ranging from Japan to the United States, but clearly with a focus, on the euro zone and, in particular, on countries such as Greece," she said.

On the other hand, she added, some emerging markets were facing the risk of overheating and inflation.

Besides, some low-income countries faced the risk of imported inflation that resulted from the high prices of commodities, including both energy prices and agricultural products, Lagarde said.

PTI

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