IMF: Global crisis ‘worrying’

SWITZERLAND: The global economic crisis is a worrying situation, said Managing Director of the International Monetary Fund (IMF) Dominique Strauss-Kahn, who warned that this crisis depends initially on banking problems.

The crisis won’t be solved unless increasing obstacles in the sector are eliminated, he admitted during a meeting of the International Labor Organization (ILO) on Monday.

He noted that stimulus packages worldwide, or government steps against the effects of current turbulences, reach 1.6 and 1.7 percent of the world’s Gross Internal Product.

In Strauss-Kahn’s opinion, the emergent countries should make sure to recover investments’ confidence to attract capital, even as many nations are injecting fiscal resources to counter the debacle.

This year the world is to suffer its first economic setback in 50 years, according to IMF estimates, including a 0.5 percent- 1 percent contraction.

According to Strauss-Kahn, there is prospect for recovery in 2010, but it will depend on certain conditions, as well as from bold policies implemented by governments.

We have to act now by encouraging demand because monetary policies have reached their limits, he concluded.

Geneva, Prensa Latina