Top > Business > 2006 > June > 2006-06-17

IMF Talks about Market Volatility, Growth

The International Monetary Fund`s (IMF?s) managing director says that the recent volatility in global share markets is a correction that has been long overdue, and represents more than anything else a reappraisal of risk amid concerns about rising inflation in the United States and around the world. Inflation jitters have sparked alarm in global markets as of late, including in a big way in the middle of this week. Stock market drops in Japan and Europe sent shares tumbling, nearly wiping out the gains made earlier this year.

Elaborating on this theme, Rodrigo de Rato said, ?We are moving to a more neutral stance in monetary policy, which is healthy because it`s more sustainable. It means interest rates are going up from what we`ve seen in recent years, so the markets are facing that change.?

While De Rato spoke about inflation, he also came out with some positive news: the outlook for global economic growth is still seen to be positive within at least the next two years. According to Rodrigo de Rato, global economic growth was seen to be at 5 percent growth in 2006, predicting the global economy will be continuing on a ?robust? pace for the fiscal year 2007. While no information was given about the economic possibilities of 2008, the positive reports give some hope that growth will continue into the next period of IMF scrutiny.