After leading the global recovery for a second year, Asia’s economic outlook remains positive but, in its latest report on the state of the region’s economy, the IMF cautions that inflationary pressures are emerging.
The Group of 20 (G20) nations reached in Korea a dramatic deal on Saturday as China, the United States agree to avoid “currency war” and to refrain from having too much trade surplus or deficit.
With many Latin American and Caribbean economies recovering faster than anticipated, the challenge for policymakers is ensuring a moderation in domestic demand to avoid overheating, the IMF said.
The International Monetary Fund once again warned Latin American nations with fast growing economies of the risk of “overheating” due to strong domestic demand, which would cause “inflation and widening of current account deficits.”
Capital flooding into Asia could lead to excessive exchange-rate moves, asset bubbles and financial instability, Domnique Strauss-Khan, the head of the International Monetary Fund, said in Shanghai Monday.
Brazil's economy will likely be larger than that of Italy next year, according to the latest data from the International Monetary Fund (IMF).
“The IMF wants to make us believe that the policies which caused the crisis are now going to be part of the solution”, said Argentina’s Central bank president Mercedes Marcó del Pont following the opening of the IMF/World Bank annual assembly.
The IMF expects the Uruguayan economy to expand strongly this year, 8.5% and 5% in 2011 in a world framework which is experiencing the slow consolidation of recovery but still highly vulnerable.
The International Monetary Fund warned of considerably high price index inflation and seemed sceptic of official GDP growth reports in Argentina as it presented its World Economic Outlook report, although it forecast a 7.5 percent growth, with a strong expansion partly due to the favourable global scenery and a strong trade with Brazil.
Progress to restore global financial stability has suffered a setback in advanced economies, the International Monetary Fund said in its latest Global Financial Stability Report, with markets still sensitive to negative surprises.