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IMF urges spending to spur growth IMF urges spending to spur growth
(about 1 hour later)
More spending by governments will be needed to stimulate worldwide economic growth, the head of the International Monetary Fund (IMF) has told the BBC.More spending by governments will be needed to stimulate worldwide economic growth, the head of the International Monetary Fund (IMF) has told the BBC.
Dominique Strauss-Kahn said he feared measures announced by the Group of 20 nations last month would not be enough.Dominique Strauss-Kahn said he feared measures announced by the Group of 20 nations last month would not be enough.
The IMF has already cut its forecast for global growth next year, and he said the next projection, due in January, would be even worse.The IMF has already cut its forecast for global growth next year, and he said the next projection, due in January, would be even worse.
Mr Strauss-Kahn spoke of "2009 as really being a bad year".Mr Strauss-Kahn spoke of "2009 as really being a bad year".
"I'm specially concerned by the fact that our forecast, already very dark... will be even darker if not enough fiscal stimulus is implemented," he said in an interview with BBC Radio 4."I'm specially concerned by the fact that our forecast, already very dark... will be even darker if not enough fiscal stimulus is implemented," he said in an interview with BBC Radio 4.
'Less bad solution''Less bad solution'
He said it would take a spending stimulus equivalent to about 2% of global Gross Domestic Product, or about $1.2 trillion (£800bn), to make a real difference.He said it would take a spending stimulus equivalent to about 2% of global Gross Domestic Product, or about $1.2 trillion (£800bn), to make a real difference.
The level of debt in the UK was "disturbing", he said, but he added that given the choice between increasing the deficit and not fighting the recession, he favoured the "less bad solution". He added that given the choice between increasing the deficit and not fighting the recession, he favoured the "less bad solution".
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He described European Central Bank chief Jean-Claude Trichet's warning that eurozone governments must keep a lid on borrowing as "noble".He described European Central Bank chief Jean-Claude Trichet's warning that eurozone governments must keep a lid on borrowing as "noble".
"He's the head of the central bank - it's his job to say things like that," Mr Strauss Kahn said."He's the head of the central bank - it's his job to say things like that," Mr Strauss Kahn said.
"We are in the biggest crisis we have experienced for 60 or 70 years and we have to take that into account," he added."We are in the biggest crisis we have experienced for 60 or 70 years and we have to take that into account," he added.
In November, the IMF lowered its global economic growth forecast to 2.2% from 3%.In November, the IMF lowered its global economic growth forecast to 2.2% from 3%.
Last week, Mr Strauss-Kahn said the IMF could cut its 2009 forecast for China to around 5% amid an "unprecedented" global slowdown.Last week, Mr Strauss-Kahn said the IMF could cut its 2009 forecast for China to around 5% amid an "unprecedented" global slowdown.