2011 should see improvement in world economy, says Pranab Mukherjee

March 4th, 2011 - 8:21 pm ICT by ANI  

Pranab Mukherjee New Delhi, Mar 4(ANI): Union Finance Minister Pranab Mukherjee on Friday said that the global financial crisis and one of the deepest economic downturns witnessed in recent decades has compelled the whole world to rethink about certain principles of economic and financial policy.

Addressing the Institute of International Finance’s (IIF) spring membership meeting here, Mukherjee said: “Nations have come together and are engaged in finding ways to ensure better regulation of markets, strengthening the monitoring and response mechanisms to global developments, reforming the international economic architecture and promoting sustainable growth.”

“At the same time, countries in the developed and the developing world have adopted revival strategies in keeping with the needs of their respective contexts, and rightly so.”

“These strategies have elements such as strengthening risk management frameworks, improving corporate governance in banks and financial institutions, implementation of Basel III, regulating rating agencies, modifying operational framework for monetary policy and proactive use of fiscal policy,” he added.

Mukherjee further said that it is too early to pronounce a verdict on these strategies, but emphasized that recent data shows some signs of improvement in the US economy as well as in Europe.

“The risks however remain, as advanced economies exhibit large fiscal deficit, high public debt and unemployment levels and indifferent aggregate demand. There is also the danger of sovereign debt crisis in peripheral Euro-zone countries spilling over to financial markets,” the Finance Minister said.

“The possibility of the global commodity inflation cutting short the economic revival in these countries cannot be ruled out. The major emerging market economies are experiencing robust growth, though volatility in capital inflows and inflation, including from the hardening of global commodity price, is a source of worry. That notwithstanding, on the whole, 2011 should see an improvement in the world economy,” he added. (ANI)

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