The International Monetary Fund early Thursday minimized worries over the global effect of the US economic downturn and urged continuing depreciation of the dollar to help reduce the enormous US current account deficit.
Those are the key findings of parts of the International Monetary Fund's annual World Economic Outlook released this week, focussing on the role of exchange rates, globalization of labor and spillovers from a slowing US economy. The main part of the report, which will give much-awaited projections for economic growth, is to be released April 10, before the IMF-World Bank joint spring conference April 14 and 15 in Washington. The IMF - which has the job of ensuring global currency stability - determined that the current slow-down in the US economy offers little threat to the rest of the world because it is driven by the cooling domestic housing market - a self-contained dynamic that relies little on exports or imports. It also found that globalization of the labor force has pumped up wages in both emerging and advanced economies. At the same time, developed countries have lost 7 percentage points of the world share of labor income and need to invest more in skills development to keep the workforce adaptable to technological advances, the IMF said. (news.monstersandcritics.com)