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Rato calls for more balanced growth

14 June 2004

MADRID – The head of the IMF appealed Monday to the United States, Japan and the European Union to work for balanced global growth.

Rodrigo Rato, the Spanish head of the IMF, said moves by these countries could compensate for the 4.6 percent growth rate forecast for this year.

Rato, addressing a seminar in Madrid, also said creditor nations – rather than the IMF – would determine the scope of  Iraqi debts which were paid off.
Opening the forum, to mark the 60th anniversary of the IMF and the World Bank, he said the IMF wanted the United States, Japan and the EU to “contribute to more balanced and sustained global growth.

“This means active efforts by the United States to reduce its deficit and by the European Union and Japan to promote sustained growth through structural reforms.”

US and European economists are concerned that large current account and budget deficits in the United States have made the US economy dependent on capital payments.

If these payments were interrupted, they warn, US interest rates could rise sharply, dampening growth worldwide.

At the same time, analysts at the IMF and elsewhere have consistently called on the EU and Japan to make their economies more dynamic, flexible and business-friendly.

Rato also said the IMF’s 2004 growth forecast of 4.6 percent was more likely to rise than fall despite the recent oil price rises.

Addressing a press conference in Madrid Rato said that while the IMF had done a “technical analysis” of Iraq’s debt, “it would be up to the creditors” to determine the extent of debt forgiveness to be offered Baghdad.

Leaders of the Group of Eight nations, Britain, Canada, France, Germany,Italy, Japan, Russia and the United States, failed to reach agreement at a summit last week on Iraqi debt.

While the United States wants to cut Iraq’s USD 120 billion debt, France and Germany want it limited to less than 50 percent.

[Copyright EFE with Expatica]

Subject: Spanish news