Europe´s move to support a second rescue for Greece and introduce refinancing options probably will calm tensions in the short term, Min Zhu, deputy managing director of the International Monetary Fund, said in speech.
“A strategy for Greece has now been articulated, which should gradually restore growth and secure improvements in debt sustainability,” he said in prepared remarks distributed by his press office today. “We need to recognize that the challenges remain massive given Greece’s huge debts, large financing needs, and weak competitiveness and growth.”
Europe still needs to modify policies to boost growth, he said in the March 1 speech, adding lower consumer price pressures provide room to ease monetary policy further. The European Central Bank must be open to implementing “unconventional” policies, he said.
The global economy will expand 3.25 percent this year, he said. The Euro area will enter a “mild” recession and other advanced economies face “weak and bumpy growth” prospects, he said. The U.S. probably will go through a “tepid” recovery as downside risks predominate, while growth in emerging countries will moderate, he said.
The deputy managing director is participating March 1 and 2 in a meeting with IMF officials and policy makers on ways to improve financial stability in Latin America. The meeting is in Punta del Este, Uruguay.
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