Despite strong growth figures recorded in the Europe, Germany in particular, and the United States economic growth in both regions will remain at slow pace as per the IMF chief economist Olivier Blanchard. His remarks were published on Monday in a French newspaper Le Figaro, Reuters reported. He reiterated that the euro zone governments should deliver credible plans so as to reduce their budget deficits for medium terms. Instead of stipulating target dates only the contents of the plans would reassure financial markets about the financial health he remarked. “Whether it is 2013 or 2014 is not important,” he said.
Impact on Asia
A slowdown in the US would have automatic impact on growth in the short term Mr. Blanchard was quoted as saying. He might be referring to the dependent on exports to the US of the major players of Asia China, Japan and India. Exports from the three countries are majorly destined to the US and hence the impact. China recently concentrated on developing domestic market to relieve itself from depending on exports to the US. Japan market is already saturated and the haunting deflation for Japan is preventing it to shift priorities in trade it seems. Decreasing prices prevent consumers to come to shops as they expect the prices may further slip. That is making hard for Japan to increase consumer spending.