The head of the International Monetary Fund (IMF) Dominique Strauss-Kahn said on Monday that although the worst of the global financial storm had passed, the world economy remains “highly vulnerable”.
“Today the storm has passed. The worst has been averted thanks to a bold and rapid policy response and thanks to cooperation,” he told delegates at the annual conference of the Confederation of British Industry (CBI) — Britain’s biggest employers group.
“We can say that the recovery has started but everyone understand that it is very fragile and still dependent on policy support. The financial conditions have improved but are still far from normal.”
Strauss-Kahn, who is managing director of the IMF, added: “The economy … [is] getting better, but [is] still highly vulnerable.”
“During the crisis, everyone was united by a common purpose. Going forward, this might dissolve. So the road ahead will be less clear cut.”
Strauss-Kahn added that nations needed to cooperate more to build on signs of worldwide economic recovery.
“The global economy has made remarkable progress over the past year, but as we stand on the cusp of recovery, new and complex challenges are already popping up,” he said.
“How do we deal with these challenges? In my view, there is really only one fundamental answer — to persevere with the spirit of cooperation that has brought us to this point.”
He added: “The challenges … all require cooperation. We need cooperation on exit strategies. We need cooperation on the new growth model. We need cooperation on financial sector regulation.”
The CBI is, meanwhile, focusing its latest annual London conference on how businesses can best recover from Britain’s longest recession on record.
Britain is the last major world power still mired in recession, after the eurozone, France, Germany, Japan and the United States all emerged from a steep global economic downturn. — AFP