Unemployment to stay till 2011: Nepal Fact

The International Monetary Fund (IMF) today said it expected high rates of unemployment to continue in developed countries until the end of

2011, at an average rate of nine per cent.

“Persistently high unemployment may be the key policy challenge facing these economies as recovery gains traction,” the Washington-based body said in a report.

The IMF’s World Economic Outlook projected that advanced economies would struggle to create enough jobs — even as their economies rebound — to meet the expansion of the work force. According to the IMF projections “the unemployment rate remains high — about nine percent — through the end of 2011. “Moreover the unemployment rate is still rising even as employment starts to grow, given the continuous expansion of the labour force.”

Studying previous global recessions, the IMF warned the United States, European countries and Japan that they must do more to jump-start job markets. “The prospect of persistently high unemployment increases the need for policies to jump-start job creation,” the report said, adding that temporary hiring subsidies could help.

That is a policy which has been backed by President Barack Obama, who has offered tax rebates to employers willing to take on the long-term unemployed. Although the US economy created 162,000 jobs in March, the largest increase in three years, the unemployment rate remains stubbornly at 9.7 per cent.

Since the recession began in December 2007, around eight million Americans have lost their jobs. Some 15 million Americans remain unemployed. The situation is similarly bleak in much of Europe. In 2009, Spain reported an unemployment rate of 18.83 per cent.

Meanwhile, US President Barack Obama today pressed Congress to “move quickly” on financial regulatory reform, setting up his next pitched political battle with Republicans.

As the dust settles after a bruising, year-long feud over Obama’s historic health care reform drive, the president is seeking to swiftly implement other big ticket items of his agenda before mid-term elections this November.