IMF wants better economic cooperation

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IMF wants better economic cooperation

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The head of the International Monetary Fund has called on the world’s leading economies to cooperate better to overcome imbalances, improve financial regulation and speed up the recovery from recession.

Dominique Strauss-Kahn told the European Parliament the recovery is going better than expected, but he added: “It’s obviously a multi-speed recovery. It appears clearly that in most advanced economies, this recovery, a rather sluggish recovery, still relies on public support and private demand is still very weak.”

Strauss-Kahn also said China’s currency the yuan is “obviously undervalued” and allowing it to appreciate would help remove global economic imbalances.

The World Bank has also urged Beijing to adopt a more flexible exchange rate as part of moves to prevent its economy overheating.

The World Bank’s top economist in Beijing, Louis Kuijs, has just raised its growth and inflation forecasts for China.

He told reporters: “With this momentum that the economy is getting into in 2010, we feel comfortable upgrading our forecast and we now project about 9.5 percent growth – GDP growth – for this year.”

On inflation, the World Bank now expects consumer prices in China to rise by 3.7 percent on average this year. That was up from its forecast of two percent in November.

And it cautioned the Chinese government to tighten its monetary policy to manage inflation expectations and contain the risk of a property bubble.