IMF Hints at Need for Less Fiscal Austerity and a Plan B for Canada
Albeit in a highly nuanced way, the IMF has called on the G-20Â to temper short-term fiscal austerity now that the global economy “has entered a dangerous phase.”
In their submission to the October 14-15 meetings of G-20 finance ministers, the IMF call for medium-term fiscal consolidation plans to “create more policy space for near-term support to growth and employment, if needed.”
They pretty much endorse Obama’s Jobs Plan … ” In the US, the American Jobs Act would provide near- term support” and say that Canada should be prepared to ease up on austerity if needed.
“In most other advanced G-20 economies ( eg. Australia, Canada, Germany, Korea and the UK) current plans are appropriate, but near term tightening should also slow if growth threatens to be substantially lower than projected, with compensating stronger medium-term adjustment.”