A return to normal is only hoped for 2010

"The risk of occurrence of a depression of the 1930s are almost zero." Olivier Blanchard, the new Chief Economist of the international monetary Fund (IMF), yesterday in Washington, commenting on the report on "Global economic prospects" of the institution, has been a measured optimism. For him, "the urgency of the situation that reveals the downward trends in financial markets forcing Governments to adopt measures". In response to concerted rate declining from seven major central banks yesterday, Olivier Blanchard found that it was "a step in the right direction." "A reduction of half a percentage point in interest rates, is not nothing." "But more must be done, particularly in Europe," said.

"Taming the storm".

The Chief Economist is forbidden to any naïve optimism, indicating that the time to come will be difficult. But "we can tame the storm with the implementation of policies fiscal and monetary appropriate", it found. According to him, the programme of measures to consider in the short term to stabilize financial markets based on three principles: to continue to provide liquidity to the banking system; redeem and RID banks of their "toxic" assets review recapitalize institutions with public or private funds.

At the macroeconomic level, monetary and fiscal policies should support growth. The recent decline in oil and raw materials prices leaves a greater margin of manoeuvre to central banks to lower their interest rates.

In this troubled context, the IMF still very logically lowered its forecasts. "Although there are exceptional uncertainty to this day, our best estimates are State of global growth around 3 next year," said Olivier Blanchard in preamble. To establish its new prognosis, the IMF is party the assumption base that "the decisions taken by the authorities American and European can stabilize financial conditions and to avoid other systemic events". Clear: that confidence will return to the market and no bank will threaten the financial system as a whole by a bankruptcy. Fact remains that it will take time to achieve. In the meantime, the appropriations available for final borrowers either companies or individuals are limited and expensive.

Falling inflation

For the coming months, the growth of developed economies will be most affected since it should not exceed... 0.5 after 1.5 this year. So that a recession is inevitable for them. In the United States first of all, since is accruing on the gross domestic product (GDP) of only 0.1 next year, against 1.6 again this year. A return to normal is only hoped for 2010. The euro is hardly better subdivided and also switches into recession. The IMF predicted growth of 0.2 next year, compared to 1.3 this year. The France and the Germany are doing the best with a very slight increase in their GDP. But, Great Britain ( 0.1), the Spain and Italy ( 0.2) see their economy to contract in 2009.

Before such uncertainty and gloom, the only good news is on inflation, which is expected to return to 2 in the industrialized economies. It may even be lower since, in its assumptions, the IMF is based on an average price of a barrel of oil of 100.5 dollars next year.