Brussels, 09/07/2009 (Agence Europe) - Meeting in L'Aquila from Wednesday 8 July, G8 leaders tried to demonstrate confidence about an economic upturn in the coming months, while, at the same time, remaining cautious on the strategies for recovery. “The worst of the crisis is behind us now,” said President of the Italian Council Silvio Berlusconi following the first day of discussions (see, too, related article). While there were “signs of stabilisation, including a recovery of stock markets, a decline in interest rate spreads, improved business and consumer confidence”, the G8 communiqué, nevertheless, spoke of the situation which remained “uncertain” and of “significant risks”. The eight leaders are cautiously embarking on the path of medium-term fiscal sustainability, highlighting their determination to take the necessary steps to bring about recovery, including continuing to provide macroeconomic stimulus. While acknowledging the need to devise appropriate strategies to remove the measures taken “once the recovery is assured”, the G8 leaves each country room for manoeuvre. “These 'exit strategies' will vary from country to country depending on domestic economic conditions and public finances, and must ensure a sustainable recovery over the long term,” says the text adopted on Wednesday.
The International Monetary Fund (IMF), which revised its previous economic forecasts upwards on Wednesday, said that prospects for growth would be less bleak from next year. According to its figures, the world economy will contract by 1.4% this year, slightly more than the 1.3% contraction predicted in April. In 2010, however, recovery will be more marked than previously forecast. The IMF is expecting world growth to be 2.5% in 2010 (compared with a 1.9% rise in GDP in its April forecasts), highlighting the impact of public intervention. There are, of course, differences in performance: the IMF forecasts contraction of 4.8% in the euro area in 2009 (compared with -5.4% in its April forecasts) and of 0.3% in 2010, while the US economy is expected to contract by 2.6% this year and move back into growth in 2010 (0.8%). In Japan, GDP will fall sharply in 2009 (-6%) before bouncing back next year, with expected growth of 1.7%. There could be a more rapid than expected return to growth, with effect from the second half of 2009, for emerging and developing economies. (A.B./transl.rt)