Global economic recovery can still be thwarted by unemployment and growing fiscal debts, according to IMF head. Economic experts are still a little doubtful of global recovery as there are some factors which can derail the progress.
IMF is extending help to countries around the world, after the global downturn started in 2007. It disbursed loans of $2 billion to Latvia and $16 billion to Hungary in 2008. It is now helping Greece with a $20 billion package to help manage its debt- stricken economy.
After senior Greek and IMF staff held negotiations to bail out the country, it has been reported that IMF is encouraging Greek government to develop a sound economic reform package and provide support for the regeneration of the economy. IMF officials replied that they are present to help put Greece on the path of economic recovery.
IMF also passed a proposal to realign the voting system and incorporate changes to better reflect the changing global economic scenario. IMF is proposing to increase voting power for countries like BRIC or Brazil, Russia, India and China, as these countries are at the forefront of global economic growth.
It also stressed that governments around the world need to improve fiscal management and develop systems which can withstand market forces in a better manner. It raised concerns over mounting deficits in developed economies. It remarked that these deficits, if not managed timely have the potential to have a devastating impact on the global economy.