Global economy 'highly vulnerable'
Monday November 23 2009
The global economy has made "remarkable" progress in moving out of recession but remains "highly vulnerable" to shocks, a finance chief has said.
Dominique Strauss-Kahn, managing director of the International Monetary Fund (IMF) told business leaders that he believed the world economy was now on the cusp of recovery.
Addressing the CBI's annual conference in London he warned policy makers that the sustainability of recovery around the world depended on decisions they will have to make in the coming months.
He also warned that as growth across the economy recovered it would take some time for jobs to follow suit.
"It is difficult to claim that the crisis is over when unemployment is at historic highs and getting higher still."
Mr Strauss-Kahn said there was some positive developments in the UK with an improvement in the overall outlook and indications that job cuts were coming to an end.
"Still, the recovery may be somewhat subdued, held back by balance sheet adjustment by banks and households."
Mr Strauss-Kahn said he believed the economic "storm" had passed and the worst had been averted but he added: "The economy remains very much in holding pattern - stable and getting better but still highly vulnerable."
Mr Strauss-Kahn identified a number of challenges for policy makers including developing a new global growth model and drawing up financial sector reforms.
The old model of growth generation based on households in the United States was "dead" said Mr Strauss-Kahn, who added: "If we are to have sustained global growth, somebody else needs to step in."
Press Association
