USA: IMF CHIEF ECONOMIST KENNETH ROGOFF CALLS ON EUROPE TO WORK HARDER TO UNLOCK ECONOMIC POTENTIAL

Record ID: 474285

  • Title: USA: IMF CHIEF ECONOMIST KENNETH ROGOFF CALLS ON EUROPE TO WORK HARDER TO UNLOCK ECONOMIC POTENTIAL
  • Date: 30th September 2002
  • Summary: (W6) WASHINGTON, DC, UNITED STATES (SEPTEMBER 25, 2002) (REUTERS) 1. MV IMF CHIEF ECONOMIST K. ROGOFF SITTING AT PANEL TABLE FOR IMF PRESS CONFERENCE; MV REPORTERS SITTING IN AUDIENCE (2 SHOTS) 0.07 2. (SOUNDBITE) (ENGLISH) ROGOFF SAYING "The main short term concern in Europe is that domestic demand is extremely weak and insufficient to fuel the recovery. Europe has enormous potential for growth. And, in fact, the phenomenon of the U.S. having higher productivity growth is a relatively recent one post 1995 as we look at in the world economic outlook. However, as long as Europe fails to adequately reinvigorate its inflexible labour markets, and better able to prepare with the consequences of its rapidly ageing population, its growth rate will likely continue to lag." 0.50 3. SCU PHOTOGRAPHER 0.55 4. (SOUNDBITE) (ENGLISH) ROGOFF SAYING "There's an enormous potential for growth in Europe that needs to be unlocked, and maybe, not to put too fine a point on it, over the coming decade Europe needs to decide whether its going to be a locomotive in the economy or a caboose." 1.19 5. WIDE OF PANEL 1.24 6. (SOUNDBITE) (ENGLISH) ROGOFF SAYING "A word to the protesters who will soon be lining our streets, we pray in peace. We recognize your idealism and your passion for a fairer and a more just world. If you care to listen, you care to listen, you will probably find that we share some of your ideas about improving the process of globalization. You might even find that you share some of ours." 1.52 7. CUTAWAY MEDIA 1.59 Initials Script is copyright Reuters Limited. All rights reserved
  • Embargoed: 15th October 2002 13:00
  • Keywords:
  • Location: WASHINGTON, DC , UNITED STATES
  • City:
  • Country: USA
  • Reuters ID: LVA4L7J4QHBMOYM4XB9B4RZG9B8X
  • Story Text: The IMF's chief economist Kenneth Rogoff has called on
    Europe to work harder to unlock the its economic potential,
    saying the region needs to decide whether it will be an
    "engine for growth or a "caboose".

    The fund's semi-annual check-up on the health of world
    economy diagnosed tepid consumption and investment in the
    12-country European region and accordingly slashed growth
    forecasts for this year and next.

    These see GDP growth of just 0.9 percent in 2002, from an
    April estimate of 1.4 percent. Next year, the bloc's economy
    should advance 2.3 percent, versus 2.9 percent seen from
    industrial powerhouse Germany, the region's largest economy,
    which is barely growing at all. It remains in a delicate
    position and could hurt its neighbours if it fails to kick
    into higher gear.

    At a press conference explaining the forecast, the IMF's
    Chief Economist Kenneth Rogoff called on Europe maximise its
    potential for growth.

    "Domestic demand is extremely weak, and insufficient to
    fuel the recovery. Europe has enormous potential for growth.

    And, in fact, the phenomenon of the U.S. having higher
    productivity growth is a relatively recent one post 1995 as we
    look at in the world economic outlook. However, as long as
    Europe fails to adequately reinvigorate its inflexible labour
    markets, and better able to prepare with the consequences of
    its rapidly ageing population, its growth rate will likely
    continue to lag," the IMF's Chief Economist Kenneth Rogoff
    told a press conference.

    He said tough decisions on labour and structural reforms
    were needed.

    "Over the next decade Europe needs to decide if it is
    going to be a locomotive to global growth or a caboose (the
    last car on a train)," Rogoff said, noting that there is a
    limited amount of impact the European Central Bank can have
    using monetary policy alone.

    On the more upbeat aspect of the outlook, Rogoff
    highlighted the fact that "world inflation is projected at a
    modern era low," with a forecast for industrialized countries
    of 1.4% in 2002 and 1.7% in 2003, which is "virtually the
    moral equivalent of zero inflation."
    He also repeated the IMF's position that the deflation
    seen in Japan is unlikely to be repeated in the rest of the
    world, but said in general "the risks are more balanced than
    at any time in recent memory."
    Still, monetary policy authorities still need to remain
    vigilant on inflation, as "rumours of the death of inflation
    are greatly exaggerated," Rogoff said, paraphrasing the great
    American author and humorist Mark Twain.

    He also pointed to the evidence that the productivity
    boom of recent years, attributed to the tech revolution "is
    real."

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