Sounding a warning, International Monetary Fund (IMF) chief economist, Olivier Blanchard has said signs of revival in the global economy should not be confused with the financial crisis being over and the countries should be ready with policies to sustain the recovery.
“The current numbers should not fool governments into thinking that the crisis is over,” the IMF chief economist said while releasing the World Economic Outlook. He also asked countries around the world to coordinate policies to achieve a global re-balancing and sustain the recovery.
The IMF in its outlook for the global economy has stated that global activity is now on the rise again. However, the world economic growth is expected to be in the negative zone of 1.1 per cent in 2009, according to the IMF. This is after, the IMF revised up its outlook on world economic growth by 0.3 percentage point for the current calendar year. The global economic growth is expected to reach 3 per cent by next year.
Further, the IMF pointed out that after a deep recession, global economic growth has turned positive, driven by wide-ranging, coordinated public intervention that has supported demand and reduced uncertainty. However, the recovery is expected to be slow, as financial systems remain impaired and support from public policies will gradually have to be withdrawn. The rebound, it added, is mainly driven mainly by emerging economies like China, India. So far as Indian economy is concerned, the IMF pegged the country’s growth at 5.4 per cent in 2009 while the economy could clock a growth rate of 6.4 per cent in 2010.
Indian economy grew by 6.1 per cent in the first quarter of this fiscal making hopes rife that the country could meet the target growth rate of 6 per cent plus as projected by the government. Industrial output also grew by 6.8 per cent year-on-year in July, lower than the previous month’s upwardly revised 8.2 per cent growth.