Zee News quoted the head of the International Monetary Fund as saying that the world economy is likely to shrink to below zero this year, in what many are now referring to as the "Great Recession.
Mr Dominique Strauss-Kahn MD of IMF said that "The IMF expects global growth to slow below zero this year, the worst performance in most of our lifetimes."
Mr Strauss-Kahn said that "Continued de-leveraging by world financial institutions, combined with a collapse in consumer and business confidence is depressing domestic demand across the globe, while world trade is falling at an alarming rate and commodity prices have tumbled."
As advanced countries focus on problems in their own economies, Mr Strauss-Kahn called on the international community not to forget Africa, where regional growth is expected to slow sharply to 3% this year, half the rate of the past 5 years. He warned the projection for 3 percent may be too optimistic.
He said that "Even though the crisis has been slow in reaching Africa's shores, we all know it is coming and its impact will be severe. We must ensure that the voices of the poor are heard. We must ensure that Africa is not left out."
He added that the crisis threatens to unravel Africa's economic and social success over the last decade and that millions of people will be thrown back into poverty.
He said that "This is not only about protecting economic growth and household incomes it is also about containing the threat of civil unrest, perhaps even war. It is about people and their futures."
He added that the combined impact of economic and financials shocks on Africa's growth will be severe. Financial flows are becoming more scarce, trade financing even scarcer and more expensive and foreign investment in Africa's stock and bond markets has fallen.
Mr Strauss-Kahn said that "As growth around the world has almost come to a halt, demand for Africa's products is plunging. Tourism revenue is likely to decline as consumers around the world are tightening their belts."
(Sourced from zeenews.com)
