January 1, 2011

IMF Economist Sees Two-Speed Recovery In 2011

IMF Economist Sees Two-Speed Recovery In 2011

(RTTNews) – A two-speed economic recovery will be extended into 2011 with rich nations facing weak growth and emerging markets moving ahead with strong recovery, according to IMF’s chief economist Olivier Blanchard.

In an interview to the Fund’s online magazine, IMF survey, Blanchard noted that along with their strong rebound, emerging economies will be facing tough challenges like managing possible overheating and capital flows. At the same time, growth in advanced economies will remain low, barely enough to bring down unemployment.

“The two-speed recovery, low in advanced countries, fast in emerging market countries, is striking and its features are increasingly stark. They will probably dominate 2011, and beyond,” Blanchard said.

He also warned that countries will be risking a healthy recovery in the absence of continued focus on rebalancing their economies in the coming year, including structural measures and exchange rate adjustments.

Countries with excessive budget deficit must rely more on external demand or exports. And, by symmetry, surplus countries, many of them emerging markets, must do the reverse, shift from external demand to domestic demand and reduce their dependence on exports, the economist noted.

Regarding the economic prospects of low-income countries, he said recovery in trade and high commodity prices have bettered economic conditions in these nations. Private domestic demand also remained quite strong



October 13, 2010

Korea’s PPP per capita global ranking is 22nd

Korea’s PPP per capita global ranking is 22nd


The nation is closing the gap with Japan on this measurement

Korea’s per capita purchasing power is expected to reach $29,790 this year, placing it 22nd in the world, a report by the International Monetary Fund (IMF) said yesterday.

This year’s purchasing power parity (PPP) is up $1,852 from the comparable figure tallied for 2009, the economic outlook report said. This places the country just behind France and Japan, whose per capita spending power is expected to reach $34,092 and $33,828, respectively. Korea’s PPP this year is also larger than the country’s nominal per capita gross domestic product (GDP) that may hit $20,164 in 2010.

The PPP index is used to gauge actual living standards by measuring purchasing power of people in different countries on the assumption that living costs and currency exchange rates are equal around the world.

The figure may be larger or smaller than the per capita GDP because of differences in consumer prices, various services and utility costs. Besides South Korea, 10 other countries, including Taiwan, Singapore, the Czech Republic and Portugal, had PPP numbers exceeding their respective GDP.

The latest IMF report, meanwhile, showed Luxembourg, Singapore and Norway to have the highest per capita PPP in the world this year, trailed by the United States.

Luxembourg’s PPP could top $80,000, with Singapore and Norway surpassing the $57,000 and $52,000 marks, respectively.

Countries such as Spain, Italy, Israel and Greece may have marginally lower per capita PPPs compared to Korea.

The findings said Korea’s PPP numbers will continue to grow steadily to reach $38,767 in 2015, which could further narrow the gap with Japan, whose per capita PPP may hit $40,195 then.

Korea’s spending power is forecast to reach over $38,000 by 2015, narrowing the gap with Japan, whose figure is expected to be just over $40,000.

The Ministry of Strategy and Finance says the reason for the large difference between the PPP and the per capita GDP is because of the exchange rate and the comparatively cheaper public utility charges in Korea.

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