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pinckie
03-21-2010, 07:25 AM
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Conscious / IMF paints a bleak picture of the requirements of the financial stress


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Conscious / N. X
21/3/2010 2:16 pm

Said John Lipsky, first deputy managing director of the International Monetary Fund said Sunday it should be on developing countries that suffer a significant deficit in their budgets to begin to prepare public opinion for the austerity measures would be needed as of next year.
Lipsky said that the size of the adjustments required very large so that should happen through the provision of health benefits and lower pensions and cut spending and increase tax revenues.
And Lipsky told the China Development Forum "Tackling these challenges head of financial priority in the near term while it could continue to concerns about the financial sustainability of undermining confidence in the economic recovery."
He said in prepared remarks to address to the Forum "has already risen strongly sovereign debt risk premiums in many countries that suffer from high debt and deficit, which imposes restrictions on the countries affected and the risk of side effects as well."
For most developed countries is still appropriate to maintain the fiscal stimulus in 2010, but steps fiscal discipline should begin next year as economic recovery continues on track.
Lipsky said he should be first on the decision-makers to explain to their fellow citizens to what is considered prudent to return to the policies is a necessary condition for the continued integrity of economic conditions.
The IMF estimates that an increase in real interest rates and keep public debt at levels beyond the crisis could reduce the opportunities for growth in developed countries, about half a percentage point annually.
As financial institutions must be strengthened in order to address the consequences of the required modifications. Among the options is promoting the legislation of fiscal responsibility and improving the methods of tax collection.
Lipsky said that the reforms will be required, such as raising the retirement age a favorable financial impact in the long term, but it could damage the limited total demand in the short term