October 08, 2008

IMF warns of global recession

Mr Dominique Strauss Kahn head of the International Monetary Fund has called for a serious response to counter a US recession.

In a session on the outlook for World Economy Forum in Davos, he said that a US recession would trigger global economic problems which should be faced by both monetary and fiscal measures.

He added that "We are facing global imbalances and the subprime crisis is only part of it. We are facing also currency imbalances, surpluses rising in some countries all those imbalances have to be addressed. The problem cannot only be addressed by monetary policy, even tough monetary policy is very important. We have to look at the whole picture."

The World Economic Forum, which began in Davos on January 23rd 2008, brought some 30 heads of states, 110 cabinet ministers and several hundred corporate chiefs together. However, participants have often been criticized for using the summit as a cover for backroom deals while pretending to deal with important economic issues.