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ECONOMIST VIEWS: IS THE CHIEF OF THE IMF RIGHT TO WARN AGAINST DROPPING THE GLOBAL FINANCIAL STIMULUS PACKAGES?

ALAN CLARKE | BNP PARIBAS
I have a lot of sympathy with what the head of the IMF has said. I am in favour of at least keeping in place quantitative easing or increasing it. The measures brought in have acted to stimulate the economy and household disposable income has remained relatively high despite the economic problems. I think dropping the measures would be a mistake and there could be a heavy price to pay.
GEORGE BUCKLEY | DEUTSCHE BANK
There is a real danger of halting the stimulus package too early. The public finances are in a much worse state than in previous recessions, such as in the 1990s and the economy will take a long time to recover. If the government does move to end the strategy, the Bank of England will be forced to move on interest rates and review its policy.

PAUL DALES | CAPITAL ECONOMICS
Theoretically, we could see a double-dip recession if all of the global stimulus was removed at once. But in practice this is not going to happen. Indeed, in the US, the fiscal situation is going to be supportive of the economy for the rest of the year and those plans are already in place. We are pretty gloomy about the economic outlook but I don’t see a double-dip recession ahead.