IMF: Global economy still weak

TEXT OF STORY

Stacey Vanek-Smith: The head of the International Monetary Fund says this morning the recovery is still weak, and he’s warning governments not to shut off the stimulus too soon. Marketplace’s Stephen Beard reports.

Stephen Beard: IMF chief Dominique Strauss-Kahn told business leaders in London today that the global economy is improving. But he said it’s still too early for governments to turn off the spigot just yet. And he said central banks should keep their interest rates low for some time to come. Better to err on the side caution he said.

The IMF boss warned that there are still many [problems besetting the global economy, like high unemployment and large budget deficits.

Andrew Hilton of the CSFI think tank says Strauss-Kahn is right to be gloomy:

Andrew Hilton: There may still be another leg of the housing crisis to come. The prime mortgage business in the U.S. doesn’t look too great. There’s still more in the housing sector in Europe to come. There are many things still to be resolved and things that could go seriously wrong.

This morning, Strauss-Kahn said that with little sign of inflation on the horizon, governments and central banks can afford to pump more money into the global economy.

In London, this is Stephen Beard for Marketplace.