IMF says unemployment in developed world to remain 9 percent through 2011

WASHINGTON, April 14 (Xinhua) -- The unemployment rate for the advanced economies will remain at about 9 percent through the end of 2011, the International Monetary Fund said Wednesday.

"Persistently high unemployment will be the key policy challenge facing many advanced economies as recovery gains traction," the Washington-based international organization said in its biannual World Economic Outlook Report.

The report said that the global economy is recovering from its deepest downturn since World War II, but the speed of recovery differs greatly across regions.

"For many advanced economies -- where the financial crisis was centered -- recovery is expected to be slow," the IMF said.

The report argued that during the Great Recession, output and unemployment responses differed markedly across developed countries, among which the United States and Spain experienced sharp increases in unemployment.

"The outlook for employment growth is not great," said Ravi Balakrishnan, an IMF economist and one of the authors of the report. "We expect that while employment creation will turn positive in 2010 in most countries, the unemployment rate will remain high through 2011."

On policies for boosting employment, Balakrishnan said that "the primary tools remain monetary policies."

"Financial pay is also very important, given the nature of crisis that many economies faced as well as a fact that many labor intensive sectors rely heavily on bank credit," he said.

The Fund released the third and fourth chapters -- the analytical part of the four-chaptered report on Wednesday. The first two chapters, which will forecast the world economic growth rate, will be released next week when the IMF and its sibling institution -- the World Bank group -- hold their 2010 spring annual meeting in Washington.