IMF and World Bank gather for talk-fest

Winston Churchill, dining out with his accustomed wit, once famously sent back a dessert, telling the waiter that "this pudding has no theme". Much the same could be said of the IMF/World Bank's annual meetings in Washington.

There is no formal "agenda", though the big issues are clear – the credit squeeze, the dollar's chronic weakness, rocketing oil prices (in real terms almost beating the 1979/80 all-time high), the odds of recession, the World Bank's Sisyphean work on poverty in Africa.

Reform of the IMF to break the EU/US stranglehold is also grinding along, as is a debate on whether the World Bank should continue to aid China and India.

So perhaps it's understandable that's there's no theme. For this circus has a number of interlocking rings, plus a few sideshows.

As well as the IMF and World Bank, there's the G10 group of the world's largest economies which send their finance ministers along in effect to "piggy back" on the back of the conference arrangements. Ditto the G24 group of developing economies. They are joined by delegations from the other 185 member states.

Lobbying them are 100 NGOs, and the proceedings are covered by a relatively modest corps of 550 journalists, condemned to an airless existence in a press room in the bowels of the fund's beige office block.

This talking shop will have much to talk about. The condition of the world economy and the possibility of an American recession could be fairly said to inform all the chatter. Today sees the launch of the IMF's world economic outlook, important even though its central prediction on global economic growth (a downgrade for 2008 to 4.8 per cent from 5.2 per cent) has been leaked (The UK, on 2.3 per cent, is cut from 2.7 per cent.) The mood will be one of caution; the harbingers of doom being put in their place, thanks to China's robustness, but only with considerable caveats and conditions. Risks remain.

More politically loaded is the dollar. As a few Gulf states start to unpeg their currencies from the dollar, and as hedge funds prepare to assault those remaining currencies linked to the greenback (their overvaluation presenting a fine trading opportunity), the dollar is definitely a talking point, though the views of the IMF are less focused.

Only a few days ago, Rodrigo Rato, the managing director of the International Monetary Fund, apparently undertook a U-turn on his previous view that the dollar was "undervalued". Now it seems, despite record lows against the euro and general feebleness, the dollar is assessed by the IMF as "overvalued" with "room for further depreciation" over the medium term.