WASHINGTON — The global economy is expected to lurch into reverse this year for the first time since World War II with appalling consequences for nations large and small — trillions of dollars in lost business, millions of people thrust into hunger and homelessness and crime on the rise.
And the pain won’t stop this year, the International Monetary Fund declared Wednesday, for what it said was "by far the deepest global recession since the Great Depression.”
To cushion the blow and head off further damage next year, the IMF is calling for additional stimulus projects from the world’s governments, including major spending for public works projects.
Even with many countries taking bold steps to turn things around, the global economy will shrink 1.3 percent this year, the IMF predicted Wednesday in its dour forecast.
"We can be fairly confident that in 2010 or even 2011, economies will not be back to normal,” said IMF chief economist Olivier Blanchard. "Which means that governments should today basically think at least about contingent plans for infrastructure spending. … Next year will be too late.”
Europe urged to act
In the U.S., President Barack Obama’s $787 billion stimulus includes money for fixing roads and bridges and other infrastructure projects. IMF officials said there’s room for Germany and other countries to do more in terms of fiscal stimulus, and the United States, too, has prodded the Europeans to ramp up efforts.
Without the help of countries’ stimulative fiscal policies — such as tax reductions or increased government spending — the blow to the global economy would be even worse, Blanchard said: "We would be in the middle of something very close to a depression.”
Even the projected 1.3 percent drop could leave at least 10 million more people around the world jobless, some private analysts said.
Allen Sinai, chief global economist at Decision Economics, thinks the global decline will be closer to 2 percent, meaning 15 million to 25 million more people out of work.
"The global downturn guarantees that countries all over the world will be hit with extraordinarily high unemployment rates,” Sinai said. "And, with the tremendous number of unemployed people comes the possibility of political unrest.”
Also rising crime could rise as millions more are forced into poverty and out of their homes, he said.
And the pain won’t stop this year, the International Monetary Fund declared Wednesday, for what it said was "by far the deepest global recession since the Great Depression.”
To cushion the blow and head off further damage next year, the IMF is calling for additional stimulus projects from the world’s governments, including major spending for public works projects.
Even with many countries taking bold steps to turn things around, the global economy will shrink 1.3 percent this year, the IMF predicted Wednesday in its dour forecast.
"We can be fairly confident that in 2010 or even 2011, economies will not be back to normal,” said IMF chief economist Olivier Blanchard. "Which means that governments should today basically think at least about contingent plans for infrastructure spending. … Next year will be too late.”
Europe urged to act
In the U.S., President Barack Obama’s $787 billion stimulus includes money for fixing roads and bridges and other infrastructure projects. IMF officials said there’s room for Germany and other countries to do more in terms of fiscal stimulus, and the United States, too, has prodded the Europeans to ramp up efforts.
Without the help of countries’ stimulative fiscal policies — such as tax reductions or increased government spending — the blow to the global economy would be even worse, Blanchard said: "We would be in the middle of something very close to a depression.”
Even the projected 1.3 percent drop could leave at least 10 million more people around the world jobless, some private analysts said.
Allen Sinai, chief global economist at Decision Economics, thinks the global decline will be closer to 2 percent, meaning 15 million to 25 million more people out of work.
"The global downturn guarantees that countries all over the world will be hit with extraordinarily high unemployment rates,” Sinai said. "And, with the tremendous number of unemployed people comes the possibility of political unrest.”
Also rising crime could rise as millions more are forced into poverty and out of their homes, he said.
by the associated press
No comments:
Post a Comment