Business | Economy
Governments must gear up to spend more - IMF
Governments should be ready to increase their spending on economic stimulus programmes if circumstances require it, the International Monetary Fund's chief economist Olivier Blanchard said in comments published yesterday.
- Reuters
- Published: 23:42 December 23, 2008
Paris: Governments should be ready to increase their spending on economic stimulus programmes if circumstances require it, the International Monetary Fund's chief economist Olivier Blanchard said in comments published yesterday.
In an interview with French daily Le Monde, Blanchard called on Germany in particular to boost its spending in the next few months as some of its European partners such as France have called for.
"The coming months will be very bad. Halting this loss of confidence, providing stimulus and, if necessary, replacing private demand are essential if we want to prevent the recession from becoming a Great Depression," Blanchard told Le Monde.
Blanchard said the IMF was sticking to a target of 2 per cent of global gross domestic product for the fiscal stimulus required, but warned more may be needed.
"If the circumstances require it, states must be ready to do more, 3 per cent or more if necessary," he said, adding: "We must think about it now because it is not easy to spend such large sums of money efficiently."
Germany has been criticised by some other European countries for not being prepared to spend more on an EU-wide stimulus programme.
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