World Economy Is Still In “Dangerous Place” According To IMF Chief

World Economy

Last Thursday, the International Monetary Fund ( IMF) Managing Director Dominique Strauss-Kahn warned the world economy is still in a “dangerous place,” and recovery, although faster than expected, is still fragile.

IMF Chief Strauss-Khan said that “The world is still a dangerous place and I would not like that too many people have in mind that the crisis is over.” He says it to the reporters on the fringes of an annual spring summit of the IMF and World Bank.

Strauss-Kahn identified of risky areas such as high unemployment, especially in some advanced economies where it continued to rise, public indebtedness, and the fragility of recovery in G-7 and other advanced economies. He admitted cooperation at the global level to confront the worst economic downturn in decades has borne fruit, as the IMF is forecasting a 4.2 percent growth of world economy next year.

He says that “Multilateralism and political policy cooperation is obviously the great legacy of this crisis and … it has to be maintained in a post-crisis world.”

IMF Managing Director called for agreement in three key areas of reform by the end of this year, namely liquidity and capital, tools to address systemic risks, and cross border resolution issues.