IMF: EU Needs Bigger Rescue Fund

JOHANNESBURG (By Phumza Macanda and Ed Cropley) – Europe needs to strengthen its financial rescue fund to reduce the risk of renewed global instability as U.S. tax cuts and buoyant emerging economies help propel the recovery elsewhere, the …

JOHANNESBURG (By Phumza Macanda and Ed Cropley) – Europe needs to strengthen its financial rescue fund to reduce the risk of renewed global instability as U.S. tax cuts and buoyant emerging economies help propel the recovery elsewhere, the IMF said on Tuesday.

Rich nations should nurture their slower growth rates by keeping monetary policy loose, while inflation pressures may force a number of emerging economies to raise borrowing costs, and global growth engine China should look to revalue its yuan currency sooner rather than later, it said.

In an updated World Economic Outlook, the International Monetary Fund said the global economy would likely expand 4.4 percent this year, a touch higher than the 4.2 percent forecast in October. It expects growth of 4.5 percent in 2012.

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