25 Jan 2013

Economic revival will be slow

4:41 pm on 25 January 2013

Fickle demand globally is likely to crimp Government efforts to reduce debt.

On Thursday, the International Monetary Fund trimmed its growth forecasts for the global economy to 3.5% this year and 4.1% in 2014.

Governments and central banks in major developed countries have pumped trillions of dollars into their economies since the global financial crisis to stimulate growth, but Harvard University economics professor Kenneth Rogoff believes the revival will be slow.

Professor Rogoff said the theme is resilient dynamism and although the resilience is there, the dynamism is more uncertain.

"In Europe where's the growth going to come from, the United States is looking a little better but not that much.

''China's stabilised but it's not going to pull the world, not clear that the world's going to grow in a way that's going to alleviate this debt problem which will probably be with us."

Professor Rogoff said persistently high unemployment, particularly in Europe, could ratchet up social tensions soon.