Business & Finance

IMF calls for urgency on Greek crisis

WASHINGTON : The International Monetary Fund on Thursday called for a "greater sense of urgency" to address the Greek de

Published July 14, 2011 Updated July 14, 2011 03:19pm

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By Muhammad Iqbal

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"The fiscal situation in Greece threatens market disorder that would affect funding rates for other vulnerable sovereigns and could have severe implications for financial institutions," the fund said in a surveillance note for Group of 20 leading economies.

It said global markets were very concerned with developments in Greece, which had serious implications for the strength of the global financial system.

The IMF also warned that delays in raising the debt ceiling in the United States had increased downside risks to the global economy. In addition, political risks are raising questions about measures to reduce debts in some advanced economies, in particular in the United States and Japan.

The fund said overheating pressures in emerging and developing countries had intensified and become evident through rising inflation and rapid credit growth.

"In emerging G-20 economies, more rapid macroeconomic policy tightening and demand rebalancing is needed in some cases," the IMF added, also urging "pragmatic" use of measures such as capital controls, to manage the surge of capital into these markets.

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