ECONOMICS REPORT - IMF Says World Economy Is Recovering
By Mario Ritter
Broadcast: Friday, April 30, 2004
This is Bob Doughty with the VOA Special English Economics Report.
The International Monetary Fund says it expects the world economy to grow more than four-percent both this year and next. Its chief economist says these could be the best two years since the early nineteen-nineties.
But the I.M.F. also says interest rates are very low and will have to rise in the future. When rates are low, more people borrow money to buy things like homes and businesses. Prices increase. The I.M.F. says property values in Britain and some other countries may be too high now. However, it warns that prices could fall sharply if interest rates rise too fast.
Some countries also worry that large United States budget deficits could harm the current recovery. The Bush administration says it will cut those deficits.
The World Bank and I.M.F. held their spring meetings last week in Washington where they are based. This year is their sixtieth anniversary. Protests outside were mostly peaceful. And they were smaller than before. Protesters called on rich nations to cancel the debt of poor ones.
A report by the I.M.F. and World Bank says private investment in developing countries is again increasing. The report says money is flowing to Brazil, China, Mexico and Russia. But it says poorer nations, especially in Africa, are not part of this growth.
Before the meetings, World Bank President James Wolfensohn said the world is out of balance. He said one sixth of the population owns eighty percent of the wealth. At the same time, another one in six people lives in extreme poverty.
Mister Wolfensohn urged developed countries to open their markets and increase aid. He also urged developing nations to improve their governments and to build good legal and financial systems.
The World Bank and the I.M.F. work together as agencies of the United Nations. The bank makes loans to developing nations. But it is not like a traditional bank. Organizations within the World Bank Group seek private investment and offer protection against lending risk. They also help settle disputes among the more than one-hundred-eighty member nations.
The I.M.F. is at the center of the international finance system. Its job is to prevent crises and support cooperation. It does research, lends money and offers technical help. The United States provides more than seventeen percent of the I.M.F. budget.
This VOA Special English Economics Report was written by Mario Ritter. This is Bob Doughty.