Washington, Aug 19: According to the chief economist of the International Monetary Fund the world is beginning to recover from the global economic crisis. He, however, warns that the road to economic revival will be a long and a hard one.
"The turnaround will not be simple, the crisis has left deep scars, which will affect both supply and demand for many years to come," says Oliver Blanchard, the chief economist of IMF.
Painting a picture of how the journey to recovery would be Blanchard said that the crisis will first manifest a decrease in potential output leading to lower growth rates.
Then, the sustained recovery in United States and elsewhere would require 'rebalancing from public to private spending'.
"Third, sustained recovery is likely to require an increase in US net exports and a corresponding decrease in the rest of the world, coming mainly from Asia," he said.
Even though the current forecasts are positive, the growth may not be strong enough to reduce unemployment, "which is not expected to crest until some time next year," he said.