World Economy Seen at Tipping Point in BBC Debate
During a broadcast live from the IMF’s headquarters in Washington D.C., the BBC’s Nik Gowing led a discussion on the state of the global economy in front of a packed audience of meetings delegates and IMF staff, many of whom were watching on a balcony on the upper floors of the building as the debate unfolded below them in the light-filled atrium.
The lively debate was watched by millions around the world (photo: IMF)
As the debate got under way, millions of viewers from all over the world had their say via Facebook and Twitter.
Dangerous phase for global economy
The IMF’s Christine Lagarde set the tone by warning again that the world economy has entered a dangerous phase. “But there is a path for recovery, she said. “That path is not as wide as in 2008, it is narrower. But if there is a collective will, a collective drive, to actually take that path and apply the remedies and the set of policies that we see, there is hope for the future.”
The IMF is forecasting a slowdown in the global recovery, with world growth projected at 4 percent in both 2011 and 2012, down from over 5 percent in 2010. Global activity has weakened and become more uneven, confidence has fallen sharply recently, and downside risks are growing, the IMF warned in its World Economic Outlook.
Mohammed El-Erian, CEO of the world’s largest investment corporation PIMCO, confessed to being “somewhere between worried and scared” about the state of the world economy. “There are three crises coming together: a growth and unemployment crisis, a sovereign debt crisis, and a banking crisis,” he said.
“I really hope that in the United States, in the international sphere, we don’t lose sight of the most important thing: that we have got to grow again,” said Austan Goolsbee of the University of Chicago. Goolsbee was until recently Chairman of the Council of Economic Advisors, which advises President Obama on economic policy.
Addressing Europe’s crisis of confidence
The most serious crisis of confidence continues to affect the euro area, where negotiations between the Greek government and its international partners―the European Commission, the European Central Bank, and the IMF―over the release of the next tranche of financial support are ongoing.
Olli Rehn, EU Commissioner for Economic and Monetary Affairs, acknowledged that growth in...
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