Author: Peter A. Petri

Last week, the IMF raised its semi-annual forecast of world economic growth for next year, from 2.5 per cent to 3.1 per cent. The projections confirm that Asia is leading the global recovery. This is good news: the last three such revisions were downward, and at the time of the last report in the spring many Asian economies were still in freefall.

But for policy makers, the beginning of the recovery means new, difficult choices. The challenge is not just to exit interventions adopted in the crisis—which dominates the policy debate—but to replace these with structural policies that promote growth through the recovery and beyond. Read more…

Author: Peter A. Petri

What do Berlin, Germany and Hua Hin, Thailand, have in common? Not winter weather, for sure. But this week, briefly, both offer a little sunshine for the world economy. European and Asian leaders meeting in these cities are pledging hundreds of billions of dollars for international financial rescue plans.

The bad news is that their actions reflect a rapidly deepening global crisis. The ‘other shoe dropping’ in the downturn could be collapsing currencies and bankruptcy in several countries. This happened in Iceland, and it could happen soon in Hungary, the Baltic countries, Pakistan and others.

The good news is that leaders are beginning to fashion a global response to the crisis. This still faces many obstacles, but a ‘yes, we can’ attitude is starting to emerge. It could bring benefits not just in stemming the meltdown, but also on other global decisions, like trade and climate change.

Read more…