Our Changing Globe

Posts Tagged ‘IMF’

New home sales did better than expected in March.
But they still fell by 0.6% last month.

Median home-sale prices in March were around $7,000 higher than in February.
But they are still far lower than they were a year ago.

Some banks have started returning bailout money amid reports of better than expected profits in the first quarter of 2009, and the stock market has rebounded since early March.
But, the value of the Dow Jones Industrial Average is still at around 60% of what is was a year ago.

Consumer confidence is rising, and consumer spending rose 2.2% in the first quarter which is the most in two years.
But businesses cut spending on equipment and software by 33.8% in the first quarter.

The administration claims that 2,000 new transportation projects have already been approved under the stimulus package.
But the construction sector lost 626,000 jobs between December 2008 and March 2009.

And whilst we’d truly love to believe that the economic crisis has bottomed out, the IMF (International Monetary Fund) estimates that the global economy will contract by 1.3% in 2009 and the U.S. economy by 2.8% which would be the most since 1946.

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Finance officials from some of the world’s top economic powers, which included, the United States, Japan, Germany, France, Britain, Italy and Canada, have pledged to get their countries banks lending again, believing it to be the best way to end the world’s worst recession since the 1930s.

Treasury Secretary Timothy Geithner and his counterparts from the world’s top seven industrialized democracies, acknowledged on Friday April 25, in a joint statement that their economies will need to be jump started in order for the global economy to rebound.

A joint statement read, “We are committed to act together to restore jobs and growth and to prevent a crisis of this magnitude from occurring again, and we will take whatever actions are necessary to bring that about. Recent data suggest that the pace of decline in our economies has slowed, and some signs of stabilization are emerging. Economic activity should begin to recover later this year amid a continued weak outlook and downside risks persist”.

A goal of raising $500 billion for an emergency lending facility was set by G-20 leaders at their London summit on April 2 and Obama has asked Congress to put up $100 billion, and Europe and Japan have pledged equivalent amounts.

Other major countries, which include China, Russia and Saudi Arabia, have not come yet honored their commitments however, because China and several other big developing countries like India want to link the support to having a bigger voice in the IMF which predicts that the global economy will shrink this year, something that’s never happened in the post World War II period.

Earlier this week the IMF called on world governments to boost stimulus spending, especially on infrastructure projects such as roads and bridges, in order to create jobs, but European nations are loathe to run up huge budget deficits and have so far resisted U.S. pleas to increase their spending.

France’s Lagarde noted, “We are in a bind, if you will. On the one hand we have to inject public money into the economy because we believe this is the strongest and best multiplier. At the same time, in the medium and long term, we need to restore the sustainability of public finance”.

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