IMF Chief warns of worse than expected 2009

Paris: The head of the International Monetary Fund says the world economy may perform even worse than his forecasters predicted only three weeks ago.

The IMF said January 28 the global economy will grow by only 0.5 per cent this year. That would be the slowest pace since World War II and is a sharp reduction from the IMF’s projection of 2.2 per cent growth in November.

“The information that has since been published doesn’t go in the right direction,” Dominique Strauss-Kahn today said at a forum on competition in Paris.

“We can’t totally rule out” that the next forecast “will be less happy,” he said.

He warned of a “difficult” 2009 which in poor countries could be “a question of survival” for many.

“You shouldn’t just look at the economic figures, you should look at the men and women who are suffering because jobs are disappearing and wages and weaker,” he said.

If governments and regulators take the right steps, the global economy should start recovering in early 2010, he said.

In a joint press conference with OECD Chief Angel Gurria, he warned against the temptations of protectionist policies, which will only aggravate the crisis.

“We should remember that there are no national solutions to a crisis which is global,” he said.

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