INTERNATIONAL MONETARY FUND'S CHIEF ECONOMIST WARNS UK.

INTERNATIONAL MONETARY FUND'S CHIEF ECONOMIST WARNS UK.

IMF ADVOCATE INCREASED CAPITAL SPEND.



"ONLY BROWN BLUNDERS ON OBLIVIOUS"



INTERNATIONAL MONETARY FUND'S CHIEF ECONOMIST WARNS UK.

SNP Treasury Spokesman, Stewart Hosie MP, has highlighted comments made by the International Monetary Fund's chief economist Olivier Blanchard who has warned that increased spending on economic stimulus may be necessary to combat the recession.



Speaking in Le Monde today (Tuesday), Mr Blanchard also said that Gordon Brown's decision to cut value-added tax by 2.5% would not influence consumers' behaviour significantly.



Mr Hosie said:



"Research published by the Scottish Government has revealed that the 2.5% VAT cut will cost £1bn in Scotland and support 7200 jobs while a capital investment programme of the same value has the potential to support 14 900 jobs.



"And the increased economic output impact is much more than double - an extra £1.5 billion, compared to £686 million.



"It is time the Prime Minister stopped claiming to be the world's saviour, heed the IMF's advice and put the Scottish economy centre stage.



"For a start he should release the £1bn of Scottish resources being withheld by the Treasury, and rule out the £1bn cuts Labour plans to the Scottish Budget.



"Increased spend on capital projects is the best way forward. Mr Blanchard knows it, the Scottish Government has highlighted it and other European leaders have recognised it. Only Mr Brown blunders on oblivious."