Washington - Developing countries are well-placed to weather the current economic crisis despite growth in the United States coming to a virtual halt, according to a report by the International Monetary Fund Thursday. The IMF also said industrial nations with more developed mortgage and financial markets have been struck harder by a correction in housing prices than poorer countries, where fewer people have access to credit.
Growth in the United States has come to a "virtual standstill" and Europe will also experience a downturn as a result of financial market turmoil and a tightening of credit markets, said Simon Johnson, the IMF's economic counsellor and director of the research department.
But poorer nations by contrast will see less of a spillover from the housing crisis into the wider economy, according to the analytical chapters of the IMF's twice-annual World Economic Outlook.
Developing countries have a "strong basis for sustaining their growth" through a rise in manufacturing exports and a surge in commodity prices that has fuelled the integration of the world's economies.
Johnson told reporters that the outlook for the economy as a whole was mixed as a result.
"I cannot recall a time where I have seen such a striking dichotomy between global commodity and credit markets, each sending conflicting signals regarding the global outlook," he said.
The IMF also said tackling climate change could have long-term economic benefits if addressed on an international level by way of a global carbon pricing scheme.
Putting a price on greenhouse-gas emissions would not only avoid the potentially "catastrophic" consequences of global warming, but would spur technological innovations and energy efficiency from companies that could actually improve their outlook in the long run, the IMF said.
Emerging economies including China, India and Brazil would also have to be part of any global treaty on curbing emissions. Developing countries will account for 70 per cent of greenhouse gases emitted in the next 50 years and must immediately begin pricing carbon emissions into their future growth, the IMF said.
The IMF's full World Economic Outlook report will be released during the IMF and World Bank spring meetings next week.
