Wednesday, June 9, 2010

IMF Warns That Risks to Global Economy Have Risen Significantly; Room For Support Is Exhausted

Naoyuki Shinohara, the IMF's deputy managing director, said today that after two years of global economic and financial upheaval, shockwaves are still being felt, "as we have seen with recent developments in Europe and the resulting financial market volatility,”

“The global outlook remains unusually uncertain and downside risks have risen significantly.”

“Adverse developments in Europe could disrupt global trade, with implications for Asia given the still important role of external demand,” “In the event of spillovers from Europe, there is ample room in most Asian economies to pause the withdrawal of fiscal stimulus.”

Government support

He added that "a key concern is that the room for continued policy support has become much more limited and has, in some cases, been exhausted.”

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