IMF’S LIPSKY SAYS 2ND-HALF GROWTH WILL FALL SHORT

Sept. 28 (Bloomberg) - John Lipsky, the No. 2 official at the International Monetary Fund, said global economic growth in the second half of the year will fall short of the fund’s forecast, predicting a “continued moderate recovery.”

“Growth has slowed in this year’s second half,” Lipsky said in the text of a Sept. 27 speech posted on the IMF’s website today, adding that “this sluggishness will persist into early 2011.” The Washington-based fund had forecast growth at a 3.75 percent annual rate for the second half, he said.

The IMF plans to release growth forecasts next week and chief economist Olivier Blanchard predicted Sept. 23 “positive but low growth in advanced countries” with growth in emerging markets “staying very high.”

Growth in the first half was “a bit” stronger than the fund anticipated, with an annual rate of about 4.75 percent, Lipsky said.

While the IMF expects the slowdown to be temporary, risks to the outlook in advanced countries include renewed strains in sovereign debt markets and weakness in real property markets, Lipsky said.

“The process of financial sector repair is unfinished, but successful repair will be critical to opening a path toward the stronger and sustained growth needed to make a meaningful dent in the current high rates of unemployment in many advanced countries,” he said.

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