IMF Report Shows Deeper Cuts Would Boost Growth |
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June 28, 2010
TORONTO—The International Monetary Fund estimates that global growth in five years would expand 2.5% faster if the U.S. and other wealthy countries slash budget deficits more deeply than they are planning, and if China and other large emerging countries do more to boost domestic consumption
TORONTO—The International Monetary Fund estimates that global growth in five years would expand 2.5% faster if the U.S. and other wealthy countries slash budget deficits more deeply than they are planning, and if China and other large emerging countries do more to boost domestic consumption.
The IMF exercise was conducted at the request of the Group of 20 industrialized and emerging nations as part the group's "rebalancing" effort.
Under the plan, countries with big deficits, especially the U.S., are supposed to import less and save more, while those with trade surpluses, especially China, Europe and Japan, do the opposite. The goal is to figure out how to make growth more sustainable with recession-scarred U.S. consumers unlikely to import as much as they once did.
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