The Worst Is Far From Over!

IMF, World Bank warn global downturn is far from over

WASHINGTON: The heads of the International Monetary Fund and World Bank pledged new resources Thursday to fight the worst global downturn since the Great Depression of the 1930s, while warning that the crisis is far from over.

Dominique Strauss-Kahn, managing director of the International Monetary Fund, said U.S. and European leaders need to fulfill pledges they made during a summit in London earlier this month to clean up their banking systems by removing distressed assets from banks' balance sheets.

With the right policies, the world economy could recover in the first half of 2010, he said.

"We still have long months of economic distress in front of us," Strauss-Kahn said.
Strauss-Kahn said there "may be need for more" stimulus spending by individual countries in 2010.

Underscoring the extent of the challenges, the IMF released a new economic forecast Wednesday that projected that the world economy would shrink 1.3 percent this year, the first decline since World War II, and what the IMF called "by far the deepest global recession since the Great Depression."

Private economists said an output decline of that magnitude would leave at least 10 million more people jobless around the world.


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