IMF says global growth expected to slow this year
(13 Apr 2005) ++AUDIO AS INCOMING++ 1. News conference 2. Reporters in press conference 3. SOUNDBITE: (English) Raghu Rajan, IMF Research Director "We see an increasing divergence across the regions, the expansion continues to be overly-dependent on growth of the United States and emerging Asia while we still await a sustained recovery in the euro area and Japan." 4. Reporters 5. SOUNDBITE: (English) Raghu Rajan, IMF Research Director "The United States continues to hum. Annual GDP growth is projected to be 3.6 percent in both 2005 and 2006. We expect a moderation in private consumption, reflecting a withdrawal of fiscal and monetary stimulus - offset by continued strength in investment. In the euro area, the modest expansion that seemed to be underway during the first half of 2004 hit the rails in the second. While the US consumer seems to give little thought for the future, European consumers seems to be beset with worry, especially about the consequences of reforms on jobs and pensions." 6. News conference 7. Reporters 8. SOUNDBITE: (English) Raghu Rajan, IMF Research Director "We should not just be looking at the short term, we need to be thinking about the medium term because of the growth of these emerging markets. We need to be prepared for that, which means creating the incentives for investments going forward. Now, in the short-term, prices (of oil) are generally right - we cannot foretell whether in fact today's price, which is around 51 dollars, is going to go up to 100 dollars a barrel or is going to go down to 25 dollars. Both are possibilities. In our view, however, we should be prepared for some volatility." 9. News conference 10. SOUNDBITE: (English) Raghu Rajan, IMF Research Director "The whole point of this strategy, if you will, is to prevent a dramatic slowdown in global growth. And clearly, if the US as a whole slows down - without anybody taking up the slack - it will not only be the US which will slow down but the rest of the world will also slow down. So the hope is that while the US slows down domestic demand, net exports increase such that the US itself doesn't have to slow down dramatically and for that you need growth elsewhere in the world." 11. News conference STORYLINE: The International Monetary Fund on Wednesday reported that the global economy's growth was expected to slow this year, while still turning in a solid performance, as high energy prices weighed a bit on activity. After bounding ahead by 5.1 percent in 2004, the global economy was projected to grow by 4.3 percent this year, the IMF said in its latest World Economic Outlook. The forecast for 2005 was unchanged from an estimate the IMF released in September. Global economic growth remained unduly dependent on the United States and China, the IMF said, adding that growth in the euro area and Japan again had been disappointing. The report was presented at a news conference in Washington DC by Raghu Rajan, the IMF's chief economist. Rajan said developing countries and emerging markets would account for an increasing share of world gross domestic product. He said their GDPs were more volatile than developed countries but also would be based more on commodities. The IMF report said recent developments in Asia had been dominated by the catastrophic tsunami and the devastating loss of human life and property inflicted on Indonesia, Sri Lanka, Thailand and several other countries in Southeast and South Asia. It added that adverse effects also were offset by reconstruction activities. Find out more about AP Archive: http://www.aparchive.com/HowWeWork Twitter: / ap_archive Facebook: / aparchives Instagram: / apnews You can license this story through AP Archive: http://www.aparchive.com/metadata/you...
