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IMF, World Bank Warn Against Complacency

   Mil Arcega | Washington  April 14, 2011

   News conference at IMF, World Bank spring meetings

   The International Monetary Fund and the World Bank stressed the need
   for continued cooperation among world economies, saying the global
   financial system remains vulnerable to further shocks. The warning
   comes as the world lending institutions prepare for its annual Spring
   Meeting in Washington.
   The world economy has weathered the worst of the economic downturn, but
   the IMF says the global financial system is not out of the woods just
   yet.
   On Thursday, IMF managing director Dominique Strauss-Kahn warned member
   countries to guard against complacency. "Certainly the recovery is
   getting stronger, but everybody can understand that it's not the
   recovery we want," Strauss-Kahn said.

   The IMF says uneven growth poses the biggest risks, with advanced
   countries growing too slowly and developing economies growing too fast.
   "The main challenges for emerging market economies have certainly to do
   with the risk of over-heating, and in low income countries, the
   question of food and fuel prices is coming back with the risk of having
   something as important and strong and difficult as we had in 2008,"
   Strauss-Kahn said.
   Despite projections of four-and-a-half percent growth in the global
   economy, the IMF says it's been a jobless recovery. Strauss-Kahn cites
   Tunisia and Egypt - where economic indicators showed growth but failed
   to create opportunities for its citizens.
   World Bank president Robert Zoellick says the disconnect helped fuel
   popular revolts, resulting in greater instability.

   "One of the lessons in the Middle East, North Africa, of some of these
   events, is that while some of the growth rates were reasonably good,
   macro-economic stability wasn't enough," he said.
   The World Bank issued a new report Thursday showing the impact of the
   unrest on food prices. Zoellick says a 36 percent increase in food
   prices since last year helped push 44 million into poverty. He warns
   another 10 percent increase in food prices will drive 10 million more
   into extreme poverty.
   "The numbers tell a grim story of persistent grinding pressure on the
   world's poor. We are all aware of the ingredients: high food costs, mix
   in price gyrations and then stir higher fuel costs, and you get a real
   toxic brew of real pain contributing to social unrest," Zoellick said.
   The comments come as finance ministers from around the world gather in
   Washington for the annual Spring Meetings of the World Bank and the
   International Monetary Fund.
   The meetings will focus on the global economic recovery and the steps
   needed to bolster financial conditions around the world.