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IMF chief says it is too soon to hold back on stimuli
02.10.09
World governments must carry on injecting stimuli into their economies, the head of the International Monetary Fund Dominique Strauss-Kahn said today.
Ahead of the IMF and World bank's annual meeting he said withdrawing the fiscal stimulus too quickly risked damaging economies which face rising unemployment and still suffer from the financial crisis.
"Of course we have to think about it, we have to prepare the exit strategy, but it's not time to implement it.
"If some had the temptation of implementing the exit strategy too early, this situation could harm the recovery," he said.
Strauss-Kahn also warned that European countries could take longer than most to recover.
He said: "Europe was less hard hit in a sense than the US when growth dropped - it held up better - but it may also respond less quickly in the other direction.
"The economy is less flexible, so it goes down less fast but rebounds less fast.
"The rigidities of the European economies that protected them to an extent during the crisis may make the restart more difficult."
He said the world had to expect weaker growth than it had experienced before the crisis.
