Europe, U.S. growth to stay weak -IMF's Blanchard

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Monday September 06, 2010 09:29:06 AM GMT

PARIS, Sept 6 (Reuters) - Economic growth will likely remain weak both in Europe and the United States, despite recent strong growth figures in Europe, and Germany in particular, IMF chief economist Olivier Blanchard said in remarks published on Monday.

A U.S. slowdown would have an automatic impact on growth in Asia in the short term but "decoupling" between emerging market and rich economies is possible in the medium term as Asian and Latin American countries shift to a greater degree of internal demand, Blanchard told French daily Le Figaro.

"If the American economy slows, that would have an impact on Asia automatically, not an enormous one but significant nonetheless," the newspaper quoted Blanchard as having said.

He also said euro zone governments should produce credible plans to reduce deficits over the medium term and that financial markets would be reassured more by the content of the plans than precise end-dates.

"Whether it's 2013 or 2014 is not important," he said.

Asked if the G20 group of economic powers should broach the question of undervalued currencies, Blanchard said that that an appreciation of the yuan was one but only one part of the shift towards a greater level of internal demand in China over time. (Reporting by Brian Love; Editing by Tomasz Janowski)

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