The status of the economic recovery has been threatened by the recent turmoil in the international sphere. The sluggish economic recovery in the European Union, plagued by the Greek and Irish economies, the increasing inflation in China, the protests in the Middle East precipitating oil spikes, have all added to the pressures to slow the pace of the global economic recovery. However, the International Monetary Fund recently came out with a statement saying that thus far, these pressures have not been enough to significantly disrupt the pace of the recovery.
The forecast offered by the IMF has stated that the global economy should expand by roughly 4.4 percent by the end of the year. This is in comparison to a growth rate of 5 percent in 2010. Included in the breakdown of the report is analysis that indicates that industrial countries should grow by 2.4 percent, while developing nations will grow by 6.5 percent. This indicates, according to Olivier Blanchard, an IMF economist, that while the global economic recovery continues to progress, the revitalization continues to be unbalanced.
Blanchard also indicated that for major industrial countries such as the United States, it is increasingly important to cut deficits. Other developing nations such as China must enact policy measures that would promote higher domestic consumption rates given the large trade surplus this particular country faces currently. The new growth report will be released in the spring meeting with the 185 nations part of the IMF as well as the World Bank. Before this, finance officials part of the G20 will meet for closed-door meetings this coming Friday. In these meetings, ministers will attempt to determine in light of the current economic circumstances what the chances are of these developments significantly affecting energy and food prices. It is expected that the global oil price will be roughly 20% above previous forecasts. The US will also likely attempt to pressure China to devalue its currency in an attempt to bolster their competitiveness in this market.
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