IMF praise for UK recession plan

Cannon_Fodder

IveSeenTheLight wrote: »

Do they disagree that the efforts the government have taken, or in that the outlook is that a recovery is not yet in place?
The IMF is praising the actions. We may have been in a far worse situation otherwise.

Just to be clear, where have the IMF said "we praise the UK"? The BBC have taken bold and wide-ranging to mean praise, through their own choice, it appears.

As best as I can find, http://www.imf.org/external/np/ms/2009/052009a.htm is the relevant IMF document...

I cannot find the word praise anywhere...

They do say;

"16. Going forward, the success of the current policy package hinges on the continued trust in the sustainability of the fiscal position. A continued strong commitment to medium-term fiscal consolidation is hence crucial. The Pre-Budget Report and the 2009 Budget already announced consolidation plans through 2013/14, taking account of risks to the outlook. Fiscal commitments would be strengthened by:
• Targeting a more ambitious medium-term fiscal adjustment path for implementation once the economic recovery is established. The focus of this adjustment profile should be to put public debt on a firmly downward path faster than envisaged in the 2009 Budget."


We may well come out of recession, as per any other recession, after around 18 months, but then the debt could stifle that recovery, either with public sector cuts creating fresh unemployment, or higher taxes discouraging investment/entreprenuers etc, leading to flat-lining, if not another recession.


As we do not have access to parallel universes, we cannot prove whether any action on the part of any countries has been good/bad/irrelevant.

It MAY have been worse, it MAY not.

Meantime, the IMF have implicitly criticised the 2009 Budget for not trying to get the debt back down quickly...

Generali

Cannon_Fodder wrote: »

Just to be clear, where have the IMF said "we praise the UK"? The BBC have taken bold and wide-ranging to mean praise, through their own choice, it appears.

As best as I can find, http://www.imf.org/external/np/ms/2009/052009a.htm is the relevant IMF document...

I cannot find the word praise anywhere...

They do say;

"16. Going forward, the success of the current policy package hinges on the continued trust in the sustainability of the fiscal position. A continued strong commitment to medium-term fiscal consolidation is hence crucial. The Pre-Budget Report and the 2009 Budget already announced consolidation plans through 2013/14, taking account of risks to the outlook. Fiscal commitments would be strengthened by:
• Targeting a more ambitious medium-term fiscal adjustment path for implementation once the economic recovery is established. The focus of this adjustment profile should be to put public debt on a firmly downward path faster than envisaged in the 2009 Budget."


We may well come out of recession, as per any other recession, after around 18 months, but then the debt could stifle that recovery, either with public sector cuts creating fresh unemployment, or higher taxes discouraging investment/entreprenuers etc, leading to flat-lining, if not another recession.


As we do not have access to parallel universes, we cannot prove whether any action on the part of any countries has been good/bad/irrelevant.

It MAY have been worse, it MAY not.

Meantime, the IMF have implicitly criticised the 2009 Budget for not trying to get the debt back down quickly...

You've hit the nail pretty squarely on the head here IMO.

A big part of the problems for the UK (and other countries racking up massive debts) start as the recession ends. How do you service all that debt while paying for the very generous pension and welfare schemes you've promised to many voters and public servants?

I don't think I've seen anyone really address this issue in any depth except by comparing now with the aftermath of WW2. Well the 10 years after WW2 were in terms of levels opf consumption available to the UK populace worse than WW2 itself. Anyone fancy a decade of austerity? Would you hang about to see it through or just beggur off to another country?

tomterm8

Generali wrote: »

You've hit the nail pretty squarely on the head here IMO.

A big part of the problems for the UK (and other countries racking up massive debts) start as the recession ends. How do you service all that debt while paying for the very generous pension and welfare schemes you've promised to many voters and public servants?

I don't think I've seen anyone really address this issue in any depth except by comparing now with the aftermath of WW2. Well the 10 years after WW2 were in terms of levels opf consumption available to the UK populace worse than WW2 itself. Anyone fancy a decade of austerity? Would you hang about to see it through or just beggur off to another country?

B*****r austerity I'm off to australia.:T:T:T

Generali

tomterm8 wrote: »

B*****r austerity I'm off to australia.:T:T:T

See you on the beach old chap!

ruggedtoast

I'm going to Wales for a week in July.

:-|

openside

Praise? I must have missed it :-)


looks like criticism to me, they are basically saying that we are in massive almost unsustainable debt and had better start paying it back or else

mystic_trev

openside wrote: »

Praise? I must have missed it :-)


looks like criticism to me, they are basically saying that we are in massive almost unsustainable debt and had better start paying it back or else

I think thay meant Prize.............for the monumental c ockups of this Government.

openside

prize would be more apt mystic

running a business myself I know what would happen if my income was £450,000, my outgoings £650,000, my income was dropping, my outgoings increasing, my overdraft was £200,000 and I asked the bank for an extra £100,000 loan

Still when you can print your own money its does make life that bit easier :-)

mystic_trev

However, it is the IMF's assessment of the financial system which will cause more jitters, since many have assumed that enough public money has now been put into the banking sector. The Fund's concluding statement, following a week-long visit to the UK, said; "The financial system may not yet be repaired to a level where banks are ready to increase lending sufficiently to underpin a strong recovery. Although banks are expected to continue to remain above minimum regulatory capital requirements, further shocks will lead to an erosion of capital buffers."

http://www.telegraph.co.uk/finance/economics/5357191/More-banks-may-have-to-be-nationalised-says-IMF.html

Davesnave

ruggedtoast wrote: »

I'm going to Wales for a week in July.

:-|

That long?

Seriously, I hear the home holiday market has gone well so far this year & the Welsh need it more than most. I go in November, when it's almost as cheap as staying at home. Also, by then they've given up charging for parking and entry to all those Cadw castles.:D