IMF Urges Policies to Boost Demand as Global Recovery Downshifts
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The world economy’s growth potential won’t soon return to levels seen before 2008 financial crisis as business investment slumps, raising the urgency for officials to find ways to stimulate demand, the IMF said.
“A large share of the output loss since the crisis can now be seen as permanent, and policies are thus unlikely to return investment fully to its pre-crisis trend,” International Monetary Fund economists said in chapters of the fund’s World Economic Outlook released Tuesday. “This does not imply, however, that there is no scope for using fiscal and monetary policies to help sustain the recovery and thus to encourage firms to invest.”