Archive for the ‘International Monetary Fund’ Category

Fearless economic forecasts

March 10, 2009

Dominique Strauss-Khan

In a warning delivered by IMF Managing Dir. Dominique Strauss-Khan during a conference of African finance ministers and central bank governors, the International Monetary fund (IMF) speaks of the deepening global financial crisis and the possibility that the world’s economic growth will be zero.

The financial meltdown can cause massive suffering, social displacement, and chaos in vulnerable countries.

The effects of the downturn may not be fast in reaching Africa, but Srausse-Khan said, “continued deleveraging by the world’s financial institutions, combined with a collapse in consumer and business confidence, is depressing domestic demand across the world.”—-Philstar (03/10/09)

Warren Buffet

On the other hand, American billionaire Warren Buffet who has the common sense of living “below his means” believes America will bounce back even though “it has fallen off a cliff.” The “Oracle of Omaha” who predicted the worst case scenario in the last 6 months, watches a nation swept with a housing slump, high unemployment, and inflation. He sees lack of confidence, confusion, and fear are defining consumer behavior at this time.—The Washington Times/ AP (03/09/09, Funk J)

Harry S. Dent

Similar gloomy predictions have been made by American economist Harry S. Dent in his book “The Great Depression Ahead : How to Prosper in the Crash Following the Greatest Boom in History.” The book is a good read. He speaks of this year as a bad season—ushering economic turmoil that none of the current generation has seen.

Nouriel Roubini

Nouriel Roubini, professor of NYU’s Stern School of Busicness believes the US recession could last up to 36 months. With no hope of ending the recession this year, “Dr. Doom” said,, “Growth is going to be close to zero and unemployment rate well above 10 percent into next year.”—-CNBC (03/09/09, Wells, J)

Pres. Barack Obama

But President Barack Obama offers bright economic forecasts with his proposed $3.55 trillion budget. He predicts that the economy will shrink by only 1.2%, and will recover in 2010 with a growth of 3.2%. However, non-partisan analysts believe this is overly-optimistic.—McClatchy Newspapers (02/26/09, Hall, K)

The public is less upbeat than Obama, but people are willing to give him the benefit of the doubt. Midway in the 100-day honeymoon period after assuming presidency, he gets a 67% approval rating, a very good grade at this time when Americans are fearful and disconsolate over the financial ruin they are dealing.(Photo Credit: Atsibatsi)=0=

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Iceland’s government fails as the economic crisis worsens

January 26, 2009

After attempts to reverse Iceland’s financial crisis since October last year, Reykjavik’s government has collapsed amid street protests from citizens who set fires and hold noise barrages with pots and saucepans. Having lost trust in government, angry Icelanders protest a mismanaged economy, worsening joblessness, and rising cost of goods.

Prime Minister Geir Haarde couldn’t quell the public’s disappointment after Iceland’s currency lost its value and banks failed that mirrored the financial troubles in Wall Street and many countries in Europe.

“The IMF announced in November it would pump about $827 million into the Icelandic economy immediately, with another $1.3 billion coming in eight installments. Iceland’s Nordic neighbors — the governments of Finland, Norway, Denmark and Sweden — announced they would lend Iceland another $2.5 billion.”—CNN.com/europe (01/25/09, Nyeberg, P)

Calling for an earlier election in May, Haarde, who had been afflicted with cancer, resigned and announced he wouldn’t run for another election. Fearing national bankruptcy, he dissolved the coalition government he headed— formed by the Social Democrat party and Independence party.

With the government’s future uncertain, the island-country’s figurehead President Olafur Ragnar Grimsson said he would consult with Iceland’s four main political parties before asking that an interim government is formed.

Similar economic and political troubles are happening in many parts of the world as well. Hard hit are the economies of the United States (USA) and Great Britain which have embarked on their respective financial remedies. The outlook of the crisis at this time is grim even if economic bail-out packages at the expense of taxpayers have been laid out. Nobody seems to know how and when the financial mess will end. Ordinary citizens are left confused and fearful of what next will happen. (Photo Credit: Nele en Jan; Jon Palma)=0=

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