Fin24

IMF: Crisis to last 10 years

2012-10-03 19:17

Budapest - The world economic crisis could take 10 years to run its course, the IMF's chief economist Olivier Blanchard told Hungarian business news site Portfolio.hu in an interview published on Wednesday.

"It's not yet a lost decade," Blanchard said, "but it will surely take at least a decade from the beginning of the crisis for the world economy to get back to decent shape."

Urging greater solidarity between member countries of the eurozone and more integration in fiscal and economic policy, he said Europe "has to go forward" with integration to make the common currency zone a success.

"It cannot stay where it is. I think nobody really wants to go back," he said.

"When a country is doing poorly the others have to be willing to help in various ways, not only out of solidarity, but because trouble in one country may well spill over to theirs.

"This is why the fiscal union and the banking union proposals being worked on as we speak are so important," he explained.

Blanchard also said the United States has a fiscal problem which it hasn't dealt with yet.

"Most analysts are confident that when it needs to be done it will be done. I hope they are right," he said.

Elsewhere, Blanchard said Japan faced a difficult fiscal adjustment and could take decades to solve its debt problems, but that the IMF did not forecast any hard landing for China.

"China has probably taken care of its asset boom although it has slower growth than before," he said.

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Comments
  • mmangaliso - 2012-10-03 19:41

    economist are useless

  • joe.irwin.50 - 2012-10-03 19:52

    We could have told the that 10 years ago.

  • J.Stephen.Whiteley - 2012-10-03 19:54

    People the world over are investing too little and spending too much, mostly on credit. But this is largely a moral crisis. Children are no longer educated to think and feel for themselves, so they look to the State for everything, and have no interest in their work.

      dawood.timol - 2012-10-03 20:19

      stephen this crisis was created by ppl to get rich quick. Unfortunately the adverse effect is that billions worldwide suffer the consequences. Pls, dont be a sponge and absorb everything the media says.

  • dylan.mugabe - 2012-10-03 20:23

    Thanks to bankers that never went to jail or lost their jobs. It will never come right in its current format.

  • leonard.rom.7 - 2012-10-04 11:42

    and what would the petrol price

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