IMF's De Rato see no enduring problem in current market troubles

Sources:

- IMF chief sees hope in market turmoil - FT
- About the Ambrosetti Forum - Official Website


Current IMF director, Rodrigo De Rato, is not entirely worried about the current market problems involving dramatic repricing of risk: recently at the Ambrosetti forum, the IMF chief said that such turmoil will be healthy for the global economy in terms of medium-term stability, even if some pain is experienced initially.

Additionally, De Rato did not downplay the seriousness of the credit squeeze, particularly in connection with subprime mortgage problems in the U.S., but is confident that the overall strength of the global economy and high credibility of financial authorities will lighten its overall impact.

Meanwhile, other experts attending the forum did not necessarily share De Rato’s positive outlook; a chief economist of the prominent investment banking firm, Goldman Sachs, believes the credit squeeze is proof that the U.S. economy will grow at a rate of less than 2% for the next several quarters. And Ken Rogoff, former economist at the IMF, believes that the economy is facing a new era of problems, wrought with uncertainty and unpredictability into the future.

Experts further believe that the possibility of the U.S. economy lapsing into a recession increased in the next year increased to 25-30 percent, while the standard year-to-year risk of recession is 10-15 percent.

For nearly 30 years, leading minds in the world of finance have been congregating at the Ambrosetti forum, poising themselves to address the major issues affecting the global economy and society in general.

Question:
Which areas of the global economy are most susceptible to the “pain” that De Rato mentioned would inevitably have to be endured as this market turmoil plays out?