Home / News / Technology / IMF Economist: Boom’s Growth Isn’t Coming Back
Print This Post Print This Post

IMF Economist: Boom’s Growth Isn’t Coming Back

Although the global recession is diminishing, "the period of above-average growth, characteristic of normal recoveries, may be short-lived or nonexistent," the chief economist for the International Monetary Fund warned Wednesday. "In normal recessions, however disruptive they are to businesses and jobs, things turn around predictably. The current global recession is far from normal," Olivier Blanchard wrote in an article for the organization. Raging unemployment is expected to be a drag on demand in all sectors of the economy, Blanchard argued. Job losses â€" usually one of the last effects to soften as an economic downturn recedes â€" are likely to continue through next year, increasing the onus on consumers to spend less and save more. That's consistent with stories today by "NPR":http://www.npr.org/blogs/money/2009/08/a_whole_new_batch_of_foreclosu.html/ and "The Washington Post":http://www.washingtonpost.com/wp-dyn/content/article/2009/08/17/AR2009081703035_pf.html/ that detail how unemployment is continuing to deepen the U.S. foreclosure crisis, even as home prices and sales are appearing to rebound. What's more, Blanchard expects that capital losses and government stimulus action will make higher taxes "inevitable" for most of the world's citizens. Even so, Blanchard said the U.S. in particular might have no choice but to continue deficit spending to improve growth. "U.S. policymakers cannot count on low interest rates alone to deliver a sustained U.S. recovery," he said.

About Author: Adam Weinstein

x

Check Also

Expert Insights: Maximizing Loss Mitigation Options

Donna Schmidt, Managing Director and Founder of DLS Servicing, discusses the intricacies and difficulties in administering the loss mitigation waterfall.