FINANCIAL CHRONICLE™
Dear Reader,

Registration with the Sri Lanka FINANCIAL CHRONICLE™️ would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.


Thank You
FINANCIAL CHRONICLE™️
www.srilankachronicle.com


Join the forum, it's quick and easy

FINANCIAL CHRONICLE™
Dear Reader,

Registration with the Sri Lanka FINANCIAL CHRONICLE™️ would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.


Thank You
FINANCIAL CHRONICLE™️
www.srilankachronicle.com
FINANCIAL CHRONICLE™
Would you like to react to this message? Create an account in a few clicks or log in to continue.
FINANCIAL CHRONICLE™

Encyclopedia of Latest news, reviews, discussions and analysis of stock market and investment opportunities in Sri Lanka

LISTED COMPANIES

Submit Post



Poll

Can there be another Covid-19 wave in Sri Lanka?

Modest US recovery, but Europe a key risk Vote_lcap68%Modest US recovery, but Europe a key risk Vote_rcap 68% [ 178 ]
Modest US recovery, but Europe a key risk Vote_lcap18%Modest US recovery, but Europe a key risk Vote_rcap 18% [ 47 ]
Modest US recovery, but Europe a key risk Vote_lcap13%Modest US recovery, but Europe a key risk Vote_rcap 13% [ 35 ]

Total Votes : 260

STOCK MARKET TRAINING
ශ්‍රී ලංකා මූල්‍ය වංශකථාව - සිංහල
Submit Post


CONATCT US


Send your suggestions and comments

* - required fields

Read FINANCIAL CHRONICLE™ Disclaimer



Latest topics

» NAMU/WATA super gain
by Kaptivajkss Today at 12:43 am

» LOFC Direction
by RAVI1980 Yesterday at 9:47 pm

» BAIRAHA FARMS PLC (BFL.N0000)
by Pbv Yesterday at 9:33 pm

» Bloodbath is Coming ? Correction is Coming ? අලුත් ගෲප් හදාගෙන අපි genuine කියලා එන පරණ මහත්(හොරුන්) වරුන් ගෙන් බේරෙන්න
by stockchaser Yesterday at 9:32 pm

» LANKA REALTY INVESTMENTS PLC -ASCO
by Pbv Yesterday at 9:16 pm

» LOLC waiting for LOFC 100+ and CLC 100+
by Sapudev Yesterday at 9:15 pm

» Key Plantation Company Fair Values - KOTA, TPL and KVAL with very High Upside
by Kaptivajkss Yesterday at 8:31 pm

» LLUB comparison between 2016- 2021 Same EPS Trading at Huge discount
by Kaptivajkss Yesterday at 8:11 pm

» TILE / LWL / RCL
by Thushara Ayya Yesterday at 5:16 pm

» HSenid IPO
by rukshan1234 Yesterday at 5:14 pm

» Month end impact on LOFC and CLC
by Swissinvest Yesterday at 3:05 pm

» Water For All - CIND
by ErangaDS Yesterday at 2:20 pm

» U.S. inflation is one of the highest in the world
by ResearchMan Yesterday at 2:09 pm

» Oil Plummets
by ResearchMan Yesterday at 2:07 pm

» ASPI Trend
by hotstock Yesterday at 12:45 pm

» GEMS at LOW price TYRE. RICH.
by Chathur Yesterday at 11:30 am

» KOTAGALA PLANTATION PLC (KOTA.N0000)
by jehan008 Fri Nov 26, 2021 11:36 pm

» HEMAS HOLDINGS PLC (HHL.N0000)
by LAMDA Fri Nov 26, 2021 11:35 pm

» CFLB hidden gem
by LAMDA Fri Nov 26, 2021 11:34 pm

» Hidden Gem - GLAS - 40/- Soon
by LAMDA Fri Nov 26, 2021 11:29 pm

EXPERT CHRONICLE™

MARKET CHAT


CHRONICLE™ ANALYTICS


ECONOMIC CHRONICLE

GROSS DOMESTIC PRODUCT (GDP)


CHRONICLE™ YouTube

LATEST TWEETS

You are not connected. Please login or register

FINANCIAL CHRONICLE™ » DAILY CHRONICLE™ » Modest US recovery, but Europe a key risk

Modest US recovery, but Europe a key risk

Go down  Message [Page 1 of 1]

1Modest US recovery, but Europe a key risk Empty Modest US recovery, but Europe a key risk Thu Jul 05, 2012 12:35 am

Redbulls

Redbulls
Director - Equity Analytics
Director - Equity Analytics

* U.S. economy expected to grow by 2 percent in 2012 as strains in Europe intensify = Key challenge is to manage pace of deficit reduction without hurting economy = Progress made but more efforts needed to increase resilience of U.S. financial system

The U.S economy continues to recover at a tepid pace, while concerns about the euro area debt crisis and uncertainty over domestic fiscal plans are creating a challenging environment for the world’s largest economy, the IMF said after wrapping up its annual review of the U.S. economy.

An IMF team, led by Gian Maria Milesi-Ferretti, Assistant Director of the Western Hemisphere Department, met with Treasury Secretary Timothy Geithner, Federal Reserve Chairman Ben Bernanke, and other senior U.S. officials from May 21 to July 2 to conduct the annual review.

"The United States remains vulnerable to contagion from an intensification of the euro area debt crisis, which would be transmitted mainly via a generalized increase in risk aversion and lower asset prices, as well as from trade channels" said IMF Managing Director Christine Lagarde during a press conference in Washington, D.C.

On the domestic front, failure to reach an agreement on near-term tax and spending policies would trigger a severe "fiscal cliff" in 2013, threatening the recovery, she added. Lagarde made these remarks after joining the final policy discussions.

The IMF expects U.S. growth to remain modest during the next two years, constrained by housing difficulties, the expiration of fiscal stimulus measures, and continued low global demand, particularly in Europe. Growth is projected at 2 percent in 2012 and about 2¼ percent in 2013.

The main policy challenge is to use the limited policy space to support the recovery in the near term, while restoring medium-term fiscal sustainability and completing financial sector reforms. The crisis and ensuing recession significantly worsened the state of U.S. public finances and exposed vast gaps in the financial and regulatory frameworks, the IMF said.

Avoiding the "fiscal cliff"

The IMF stressed that it is critical to remove the uncertainty created by the "fiscal cliff" in 2013—when temporary tax provisions expire and automatic spending cuts take effect. Should the fiscal cliff materialize, the IMF warned that it could have severe consequences for domestic growth. The authorities therefore need to ensure that the pace of deficit reduction does not sap the economic recovery. The IMF also raised the importance of promptly raising the debt ceiling to forestall the risk of financial market turmoil.

At the same time, the IMF said that a comprehensive and credible fiscal consolidation plan is crucial to ensure that the public debt-to-GDP ratio stabilizes by mid-decade and gradually falls afterwards.

Given the size of the budget deficit, age-related spending pressures, and the relatively low tax ratio, the fiscal consolidation effort would need to rely on both higher revenues and cuts in entitlement spending. Some options include health care and Social Security reforms, reducing tax expenditures, and possibly introducing a value-added tax and carbon taxes.

Supporting the recovery

With inflation kept in check by the sizeable economic slack, and unemployment projected to decline only slowly, the IMF supports the Federal Reserve’s intention to keep the monetary policy stance accommodative for an extended period. Should the outlook worsen, a number of tools could be used for further easing, including through additional purchases of mortgage-backed securities.

Removing distortions

The IMF stressed the need for more aggressive efforts to accelerate the resolution of the housing crisis. These include measures to facilitate the conversion of foreclosed properties into rental units and supporting access to refinancing on a larger scale. Another option would be to allow mortgages on principal residences to be modified in personal bankruptcy without secured creditors’ consent ("cram-downs").

At the same time, the IMF said that measures are needed to reduce the risk that long-term unemployment could morph into higher structural unemployment and reduce potential output. Active labor market policies, such as training and support for job search, should therefore be adequately funded.

Regulation of the financial sector

Good progress has been made in reforming the U.S. financial system, but vulnerabilities remain, the IMF said.

Four specific areas were highlighted for further progress:

• Regulation of the shadow banking system: Given the size of the industry and prominence in short-term funding, strengthening regulation of Money Market Mutual Funds remains critical.

• Volcker rule: A ban on proprietary trading by banks should, in principle, reduce systemic risk.

• Housing finance: Measures to help the recovery of private securitization would ease mortgage market conditions.

• Funding for regulatory agencies: Adequate implementation of domestic and international reforms requires appropriate funding to the regulatory and supervisory agencies.

Global spillovers…

As the world’s largest economy, the policy actions of the U.S. have significant effects on global growth and stability. Striking the right balance between fiscal consolidation and economic policy support would benefit the rest of the world, as it would avoid the risk of a spike in U.S. interest rates and an abrupt decline in U.S. growth in 2013. Further progress in implementing financial reforms would also be globally beneficial and reduce the scope for regulatory arbitrage.

A final report will be issued once it has been discussed by the IMF’s Executive Board in late July.

(IMF Survey)
http://www.island.lk/index.php?page_cat=article-details&page=article-details&code_title=55979

Back to top  Message [Page 1 of 1]

Permissions in this forum:
You cannot reply to topics in this forum