IMF sees US economy recovering by 2009
In what could ease the concerns over global economy, the IMF on Friday said the slowdown in US economy has been less than feared and it would recover gradually in 2009, even though banks may be in for more losses.
By PTI |
WASHINGTON: In what could ease the concerns over global economy, the IMF on Friday said the slowdown in US economy has been less than feared and it would recover gradually in 2009, even though banks may be in for more losses.
The Fund said there could be further monetary tightening which could lead to further bank losses, generating a longer slowdown and advised vigil against price rise though it anticipates a lessening of inflationary pressures.
"Considering the severity of the shocks that have hit, the economy has held up well so far, with substantial monetary and fiscal stimulus, buoyant net exports, and healthy corporate balance sheets all providing welcome support...,IMF said this morning by way of a concluding statement after the 2008 Article IV Consultations with the United States.
However, their effect is being blunted by growing strains on household and bank finances, and now also by higher commodity prices," the Fund added.
".... as such, we project that real GDP (Q4/Q4) will be roughly flat in 2008, and recover gradually in 2009 to around 2 per cent. Although inflation expectations have ticked up on surging commodity prices, we expect that price pressures will be contained as commodity prices peak and economic slack rises" the Fund has said.
"Although inflation expectations have ticked up on surging commodity prices, we expect that price pressures will be contained as commodity prices peak and economic slack rises," IMF said.
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