High levels of national debt and a still-shaky financial sector threaten to derail the global economic recovery, the IMF warned on Friday.
Amid concerns about the health of European banks and of public finances in Europe, Japan and the US, the IMF warned that a stronger-than-expected recovery would now begin to slow.
“Downside risks to the recovery have intensified. The combination of sovereign risk and a still weak financial sector in many advanced economies poses significant risks to the recovery,” the IMF said. “Global growth has been somewhat stronger than expected during the first half of 2010, but is projected to slow temporarily during the second half of 2010 and the first half of 2011.”
The fund warned the recovery remained “fragile” in advanced economies, as private firms struggle to pick up the slack left by retreating government stimulus spending.
“In emerging economies, the growth outlook remains strong, although activity is moderating to more sustainable levels,” it said.
Chief among the longer-term risks is the fiscal situation in the world's advanced economies.
“Despite some improvements for 2010, the medium-term fiscal outlook in G20 advanced economies remains challenging,” it said.
The Washington-based body warned of a funding bottleneck as European nations try to extend their borrowing by rolling over bonds.
“Sovereign debt maturing in vulnerable euro area economies in the second half of 2010 and 2011 exceeds US$400 billion ... In refinancing this debt, these countries will face competition from the significant rollover needs of both other advanced economies,” it said.
That funding need is expected to reach about US$4 trillion.
Meanwhile, the IMF on Friday announced it would provide Greece with a further 2.57 billion euros (US$3.26 billion), the second installment of an economic rescue package.
The payment is part of a 110 billion euro IMF-EU package to help the country overcome a crushing debt crisis and backstop the finances of other European countries that are teetering.
Greece is eligible for up to 30 billion euros of the fund. Athens will have received 8.3 billion euros once the latest payment is completed.
DISCONTENT: The CCP finds positive content about the lives of the Chinese living in Taiwan threatening, as such video could upset people in China, an expert said Chinese spouses of Taiwanese who make videos about their lives in Taiwan have been facing online threats from people in China, a source said yesterday. Some young Chinese spouses of Taiwanese make videos about their lives in Taiwan, often speaking favorably about their living conditions in the nation compared with those in China, the source said. However, the videos have caught the attention of Chinese officials, causing the spouses to come under attack by Beijing’s cyberarmy, they said. “People have been messing with the YouTube channels of these Chinese spouses and have been harassing their family members back in China,”
The Central Weather Administration (CWA) yesterday said there are four weather systems in the western Pacific, with one likely to strengthen into a tropical storm and pose a threat to Taiwan. The nascent tropical storm would be named Usagi and would be the fourth storm in the western Pacific at the moment, along with Typhoon Yinxing and tropical storms Toraji and Manyi, the CWA said. It would be the first time that four tropical cyclones exist simultaneously in November, it added. Records from the meteorology agency showed that three tropical cyclones existed concurrently in January in 1968, 1991 and 1992.
GEOPOLITICAL CONCERNS: Foreign companies such as Nissan, Volkswagen and Konica Minolta have pulled back their operations in China this year Foreign companies pulled more money from China last quarter, a sign that some investors are still pessimistic even as Beijing rolls out stimulus measures aimed at stabilizing growth. China’s direct investment liabilities in its balance of payments dropped US$8.1 billion in the third quarter, data released by the Chinese State Administration of Foreign Exchange showed on Friday. The gauge, which measures foreign direct investment (FDI) in China, was down almost US$13 billion for the first nine months of the year. Foreign investment into China has slumped in the past three years after hitting a record in 2021, a casualty of geopolitical tensions,
‘SOMETHING SPECIAL’: Donald Trump vowed to reward his supporters, while President William Lai said he was confident the Taiwan-US partnership would continue Donald Trump was elected the 47th president of the US early yesterday morning, an extraordinary comeback for a former president who was convicted of felony charges and survived two assassination attempts. With a win in Wisconsin, Trump cleared the 270 electoral votes needed to clinch the presidency. As of press time last night, The Associated Press had Trump on 277 electoral college votes to 224 for US Vice President Kamala Harris, the Democratic Party’s nominee, with Alaska, Arizona, Maine, Michigan and Nevada yet to finalize results. He had 71,289,216 votes nationwide, or 51 percent, while Harris had 66,360,324 (47.5 percent). “We’ve been through so