World economy not so bad despite crisis: IMF
November 10, 2008 SAO PAULO (AFP) - The world financial crisis could still deal some nasty blows to emerging countries, but swift action by central banks in advanced economies meant overall “things aren’t going that bad,” IMF chief Dominique Strauss-Kahn said Sunday.
Speaking after a meeting here of finance ministers and central bankers from the G20 group of developed and developing nations, Strauss-Kahn said discussions were dominated by the sharp downward revision of economic growth around the world.
“For the first time in the post-war period we have a negative forecast for growth for advanced economies, and also a large revision for emerging countries,” he told reporters.
“Not only that, there are still some very important downside risks that have to do with shortage of capital in emerging markets.” Foreign capital inflows that many emerging markets, such as those in Latin America and eastern Europe, had been depending on for their economic growth are “drying up,” he noted, saying: “The whole picture is a rather gray picture.”
Nevertheless, those officials at the meeting, who pull the levers of the world’s major economies, were not panicking, Strauss-Kahn said.
That was because of quick action by many economic heavyweights - most recently China, which on Sunday announced a 568-billion-dollar stimulus package - and the decision by central banks to inject liquidity into the banking system.
The IMF president said he was “happy” with China’s move, and hailed recent actions by the United States and Europe.
Asked about divergences within the G20 " notably US resistance to EU calls for deep reform of the financial system " Strauss-Kahn referred to the G20 summit in Washington next Saturday of that body, saying: “If there was already a single voice you wouldn’t need a meeting.”
He declined to predict an outcome of that summit.
“When you have a heads of state and heads of government meeting you can never know what the outcome will be.”