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IMF mostly optimistic about global growth


IMF mostly optimistic about global growth


As the International Monetary Fund and the World Bank started their annual meetings in Singapore, the IMF said the global economy is set for another year of strong growth, but risks remain. As the bankers and economists met in a convention centre surrounded by heavy security, IMF chief economist Raghuram Rajan said a great deal hinges on how much the US economy will slow down: “Growth is a risk, partly because the United States has been so central to world growth, it’s hard to know how much world growth outside is autonomous to the States. The US is slowing, but we don’t know how much, partly because a lot of it is dependent on the housing market and the links from the housing market to the rest of the economy. Neither is particularly clear.”

The IMF is forecasting 3.4% growth for the US, the world largest economy, in 2006 and 2.4% for the euro zone. For 2007 it predicts slower growth in the US at 2.9% and just 2% for the euro zone; that is lower than recent estimates from the European Commission and the European Central Bank. Worldwide, the IMF believes economic growth will be 5.1% this year and 4.9% next year. On the streets of Singapore some residents appreciate the amounts that the thousands of delegates will spend while they visit, but are upset about the disruptions to locals’ lives from the security measures that have closed many streets around the venue for the meetings. School student Joyene Nazatul said: “It brings in money to us, but to put in a lot of effort just to make sure these people are comfortable is a bit taxing on people who work.” But anyone who is unhappy about the IMF and World Bank being in town will not have a chance to protest as Singapore has a ban on street demonstrations.
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