DAVOS, Switzerland (Reuters) - Following are highlights from the Global Economic Outlook panel at the World Economic Forum in the Swiss resort of Davos on Saturday.
U.S. ECONOMIC ADVISER LARRY SUMMERS
“What we are seeing in the U.S. is a statistical recovery and a human recession.
“This suggests that the policies to contain to economic collapse have been successful.”
“My judgment ... and most people’s judgment ... will be that GDP growth will continue at a moderate rate at least for the next several quarters ... What is disturbing is the level of unemployment. This is not just a cyclical phenomenon but also a structural phenomenon.”
“I think it is also essential ... that in the United States and other parts of the industrialized world, our ability to maintain confidence over the short and medium term will depend not on taking overly rapid fiscal consolidation.”
“Not everyone can have export-led growth. Countries traditionally have export-led growth desire to continue that growth, countries that have been substantial borrowers want to reduce that borrowing. There’s a mismatch, It’s serious... it’s an adding up problem.
PEOPLE’S BANK OF CHINA DEPUTY GOVERNOR ZHU MIN
“China had a good year, we had GDP growth of 8.7 percent but behind the number the structure is much more balanced.
“East coast lower growth around 7, other regions around 12.”
“We want to reach more balanced and consumption growth for this year ... hopefully the international environment is good.”
“We hope consumption contribution to GDP will be more or less equal to investment.”
“We see in the U.S. economy we will have a bumpy road quarter by quarter ... which will have an impact on Chinese exports.”
“We want to increase consumption but it will take some time.”
“We need global coordination on structural change ... for us to increase consumption and for others to increase consumption or to increase savings.”
“The good news is that young people in China have very different consumption patterns.”
“The second issue is that China has accumulated a lot of forex reserves. This is a problem ... people say we have too much money.”
“The exchange rate issue is an issue obviously within this rebalancing issue, but it is a small part.”
“A stable exchange rate, when a crisis comes in, is good for China and for the world.”
IMF MANAGING DIRECTOR DOMINIQUE STRAUSS-KAHN
“Growth is coming back and faster than expected, but is still fragile ... Private demand is still rather weak.
“It shows the Asian part of the world is now close to total recovery. The question of dealing with different speeds in the economy ... is something which we have to look at with great attention.”
“If you exit too early, then the risks are much bigger.”
“I think the well known question of imbalances are looking a bit better than before the crisis.”
“On the one hand U.S. consumers are saving more, that’s going to last for a rather long time because of important changes to household behavior. That’s good news for imbalances.”
“If you are looking for new sources of growth, everybody’s eyes are turning to emerging countries including China, hoping a decrease in U.S. consumption is offset by an increase in demand there.”
“You deal with liquidity of your own financial sector. The question of coordinating this financial sector reform is top priority. We’re not going exactly in the right direction.”
“Progress has been done but it has not been enough. It has taken 12 years to build Basel (regulations) but we don’t have 12 years to build financial reform today. We need to speed up.”
“My call is a call for a more coordinated way to make these reforms.”
FRENCH ECONOMY MINISTER CHRISTINE LAGARDE
“The coordination of economic policies is extremely difficult. That’s what we’ve been experiencing in the euro zone. To coordinate and to make sure we see the same urgency at the same level, that’s a tough call. All members of the euro zone realize the urgency to deliver commitment. It’s an everyday test.”
“We have this LUV shape. Clearly Europe is going to grow slower relative to emerging markets. We’re seeing readjustment at the moment. How do we regulate to control the overheating that is likely to take place on economic front or social political front? It’s again a timing issue.”
“We need to pursue recovery ... empty the stimulus bag, keep up the reform program and we have to restore public finances.
“Clearly Europe is going to grow slower...relative to emerging markets.”
JAPANESE NATIONAL STRATEGY MINISTER YOSHITO SENGOKU
“The process of correcting the excessive consumption in the U.S. it will take some time in our view.”
“We are now on the track of gradual recovery. In Japan, manufacturing operations are still at 80 percent ... therefore we have latent internal unemployment. Many companies try to maintain employment without laying off workers. We are not yet in autonomous, fully-fledged recovery.”
DEPUTY CHAIRMAN OF INDIAN PLANNING COMMISSION MONTEK SINGH AHLUWALIA
“Next years we will reach about 7 percent (growth in GDP). Asia has weathered this crisis ... We would hope in coming years we will move from 7.5 percent to over 8 percent next year then get back into 9 percent. It’s going to be domestic investment replacing what has otherwise been export demand. That investment should be in infrastructure, that’s lacking in India. There have to be external financing also. We move from near balance current account to a somewhat larger deficit I don’t think the deficit will be more than 2.5 pct of GDP.”
DEUTSCHE BANK CEO JOSEF ACKERMANN
“We should better keep everything on a cautious side. The banking sector is clearly benefiting from tremendous initiatives taken by governments and central banks but there are also risks of timing and exit strategies. We have a complete change in geopolitical structure. This adjustment to Chinese growth and Chinese capacity means there’s a lot for the rest of the world. In a transition phase from super power dominating and you will see a lot of uncertainties.
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