Top IMF and World Bank officials gathered for semi-annual meetings yesterday and today in the shadow of the worst global slump since the 1930s, but with perhaps the first signs of recovery peeping through.
The IMF forecast earlier this week the global economy would contract 1.3 percent this year. The forecast marked a dramatic downgrade of previous estimates and set the tone for the meetings of the top steering committees of the 185-member IMF and its sister institution the World Bank.
But on Friday, the G7 major economies said the worst might finally be over — although the outlook remained clouded and difficult.
“Recent data suggest that the pace of decline in our economies has slowed and some signs of stabilization are emerging,” a G7 statement said. “Economic activity should begin to recover later this year amid a continued weak outlook and downside risks persist.”
The G7 — Britain, Canada, France, Germany, Italy, Japan and the US — said they were “committed to act together to restore jobs and growth and to prevent a crisis of this magnitude from occurring again.”
US Treasury Secretary Timothy Geithner, the G7 host, said that “without underestimating the challenges we still face, there are signs that the pace of deterioration in economic activity and trade flows has eased.”
He too cautioned against any simple optimism that the worst global slump since the 1930s would be over quickly.
“We are right to be somewhat encouraged but we would be wrong to conclude that we are close to emerging from the darkness that descended on the global economy [in September],” he said in a statement.
A subsequent meeting of the G20, which includes the G7 and developing countries such as Brazil, China, India and Russia, ended without a statement.
The more positive G7 tone follows data showing that the downturn is easing but many officials remain reluctant to give the all-clear, warning that more bad news is to come which could blight any “green shoots” of recovery.
Others also warn that recovery or not, the human cost of the crisis is very high, still rising and should not be forgotten.
On Friday, a World Bank/IMF report said the crisis means up to 90 million more people will remain trapped in extreme poverty this year while the chronically hungry could top 1 billion.
“Our belief is that the crisis is far from over,” IMF chief Dominique Strauss-Kahn warned on Thursday.
“The beginning of the recovery has to come from the United States and will come from the United States,” Strauss-Kahn said, calling for greater efforts to restore the banking system to health. “You never recover before you complete the cleaning up of the balance sheet of the financial sector ... The recovery in 2010 relies a lot upon the effort that still has to be made in this domain so, I’m again asking on the eve of these meetings for more effort to be made in this direction.”
The IMF estimates that US, European and Japanese banks will have acknowledged only a third of their losses on soured assets between mid-2007 and next year, with the total losses put at near US$4 trillion.
Quanta Computer Inc (廣達) chairman Barry Lam (林百里) is expected to share his views about the artificial intelligence (AI) industry’s prospects during his speech at the company’s 37th anniversary ceremony, as AI servers have become a new growth engine for the equipment manufacturing service provider. Lam’s speech is much anticipated, as Quanta has risen as one of the world’s major AI server suppliers. The company reported a 30 percent year-on-year growth in consolidated revenue to NT$1.41 trillion (US$43.35 billion) last year, thanks to fast-growing demand for servers, especially those with AI capabilities. The company told investors in November last year that
Intel Corp has named Tasha Chuang (莊蓓瑜) to lead Intel Taiwan in a bid to reinforce relations between the company and its Taiwanese partners. The appointment of Chuang as general manager for Intel Taiwan takes effect on Thursday, the firm said in a statement yesterday. Chuang is to lead her team in Taiwan to pursue product development and sales growth in an effort to reinforce the company’s ties with its partners and clients, Intel said. Chuang was previously in charge of managing Intel’s ties with leading Taiwanese PC brand Asustek Computer Inc (華碩), which included helping Asustek strengthen its global businesses, the company
Taiwanese suppliers to Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) are expected to follow the contract chipmaker’s step to invest in the US, but their relocation may be seven to eight years away, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. When asked by opposition Chinese Nationalist Party (KMT) Legislator Niu Hsu-ting (牛煦庭) in the legislature about growing concerns that TSMC’s huge investments in the US will prompt its suppliers to follow suit, Kuo said based on the chipmaker’s current limited production volume, it is unlikely to lead its supply chain to go there for now. “Unless TSMC completes its planned six
Power supply and electronic components maker Delta Electronics Inc (台達電) yesterday said it plans to ship its new 1 megawatt charging systems for electric trucks and buses in the first half of next year at the earliest. The new charging piles, which deliver up to 1 megawatt of charging power, are designed for heavy-duty electric vehicles, and support a maximum current of 1,500 amperes and output of 1,250 volts, Delta said in a news release. “If everything goes smoothly, we could begin shipping those new charging systems as early as in the first half of next year,” a company official said. The new
RSS