The International Monetary Fund (IMF) stated that the impact of the global financial crisis will interfere with economic growth for at least the next seven years. The IMF also recommends structural reforms to reduce the damage.
“Typically the banking crisis has long-term impact on the level of economic output, although growth eventually recover. The low employment, investment and productivity all contributed to the decline in output,” said the IMF World Economic Outlook (WEO) released his economists.
The conclusion is presented in a report released ahead of the agency’s annual meeting in Istanbul early October. IMF economists refer to the 88 banking crises during the last four decades in some countries.
Reduced output in the medium term after the banking crisis, substantial votes. Seven years after the crisis, output will fall relatively close to 10% on average. The persistence of the effects of banking crises arising from the decline assessed economic output in the beginning of the crisis, which was followed by weak investment and rising unemployment.
“Output per capita is not restored to pre-crisis levels because of capital per worker, unemployment and productivity levels are generally not returned to pre-crisis level in seven years after the crisis occurs,” the IMF economists.
Further, the IMF stated that the results of a study that led to suggestions that the domestic macroeconomic policies necessary proactive in mitigating the short term to medium-term decline inner output.
