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IMF head warns of ‘double-dip’ for global economy

The head of the International Monetary Fund has urged countries not to end their respective fiscal stimulus packages amid concerns of another economic downturn.

Dominique Strauss-Kahn believes that government’s across the globe should continue to bolster growth amid fears of a ‘double-dip’ recession.

Strauss-Kahn believes the economy remains fragile and points to the fact that recovery has been led by China and Asia, pointing to a more sluggish recovery in developed countries.

He says: “The best indicator is private demand and unemployment.

“In most countries, growth is still supported by government policies. For as long as you do not have public demand strong enough to offset the need of public policy, you shouldn’t exit.”

Strauss-Kahn has also suggested the IMF may raise its growth forecast for 2010. The IMF currently predicts the global economy may grow by 3.1 per cent this year.

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  1. A no brainer really for Strauss-Kahn. Mathmatically he has a 50/50 chance of getting it right.
    Historically a goodly number of recessions have been ‘W’ shaped double dips, so even without going into details, the odds are probably even more in his favour than that.
    So he calculates he has every chance of enhancing his reputation by highlighting this. If it turns out he is correct then he basks in the sunlight and says ‘I warned Governments about this’ and if it doesn’t happen then he can say that ‘Governments headed his warnings’!

    ‘Win Win’ for Strauss-Kahn!

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