IMF warns of acute debt challenges for West

By James Quinn, US Business Editor 840PM GMT twenty-two March 2010

The International Monetary Fund has warned that modernized economies such as the UK and US are confronting an "acute" plea in shortening debt loads following the monetary crisis, a complaint that could in spin bushel mercantile growth.

John Lipsky, the IMF"s initial emissary handling director, pronounced that high levels of supervision debt and mercantile deficits have already led to increasing risks for a series of countries.

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Mr Lipsky cautioned that such problems could delayed mercantile expansion over the medium-term and trigger higher seductiveness rates.

"Maintaining open debt at the post-crisis levels could revoke intensity expansion in modernized economies by as most as half a commission point annually compared with pre-crisis performance," he pronounced in a debate in Beijing.

He went on to contend that for "most modernized economies" " mercantile converging should proceed in aspiring in 2011, and gave notice that simply unravelling impulse programmes would not be enough.

Mr Lipsky cited justification that all G7 countries solely Germany and Canada will have debt-to-GDP ratios close to or in additional of 100pc by 2014.

"This surge in supervision debt is occurring at a time when vigour from rising health and grant spending is construction up," he continued.

In a apart debate in Hanoi, Mr Lipsky pronounced the tellurian economy will miscarry by 4pc in 2010 and 4.25pc in 2011.

However, what the IMF conditions the "emerging Asia" segment together with China and India - will grow at some-more than twice the pace, with an mercantile expansion rate of 8.25pc estimated in the stream year.