Recession over, but recovery to be sluggish and usher in higher taxes: IMF

By The Canadian Press OTTAWA - The International Monetary Fund says most countries will need to raise taxes in the future to pay off the trillions of dollars they spent in fighting the global recession. The IMF's chief economist Olivier Blanchard says in an article to be published Wednesday that governments acted properly in ramping up spending in the face of the worst slump since the Second World War. But he adds that the time will soon come to pay the piper and that higher taxes in nearly all countries is inevitable. Blanchard says the recession that began early last year is virtually over, but cautions that it has left deep scars that will take years to heal. He says while growth will be positive in most countries in the next few years, it will be sluggish. In many countries, he says, the potential of the economy will never return to the where it stood before the recession hit. As well, the IMF says there needs to be a re-balancing among nations, with countries like the U.S. increasing imports and economies like China increasing imports. Canada's finance minister Jim Flaherty has rejected the notion he will have to raise taxes to pay off for the about $47 billion in stimulus the Conservatives have committed over two years.