IMF says the world needs to fully cooperate in economic crisis

Austin News.Net
Thursday 9th October, 2008

International Monetary Fund managing director, Dominique Strauss-Kahn, has claimed the US financial crisis has put the world on the brink of a recession that can only be resolved through international cooperation.

In a press conference at IMF headquarters in Washington, Strauss-Kahn warned that a lack of confidence was the most immediate crisis gripping financial markets.

He said it had rendered typical government tools, such as lowering interest rates, much less effective.

Strauss-Kahn said the priority has to be the recapitalisation of financial institutions, whose balance sheets have been decimated by the drop in value of mortgage assets.

He urged advanced economies to coordinate their efforts to help those cash-strapped banks and lenders.

Strauss-Kahn said: “We are on the cusp of a recession. Cooperation and coordination in action is the price of success. No country is immune from the financial turmoil.”

The IMF has forecast global growth will fall to three percent in 2009, down from 3.9 percent this year.

A global recession is considered to exist when growth registers under 3 percent.

Advanced economies were projected to grow at close to zero over the course of next year.

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