The global economy has made “remarkable” progress in moving out of recession but remains “highly vulnerable” to shocks, a finance chief said today.
Dominique Strauss-Kahn, managing director of the International Monetary Fund (IMF), told business leaders that he believed the world economy was now on the cusp of recovery.
He said there was some positive developments in the UK with an improvement in the overall outlook and indications job cuts were coming to an end (see the Recession-proof your finances guide).
“Still, the recovery may be somewhat subdued, held back by balance sheet adjustment by banks and households.”
He said he believed the world economic “storm” had passed and the worst had been averted but added: “The economy remains very much in holding pattern – stable and getting better but still highly vulnerable.”
Addressing the CBI’s annual conference in London, he warned policy makers that the sustainability of recovery around the world depended on decisions they will have to make in the coming months.
He also warned that as growth across the world economy recovered it would take some time for jobs to follow suit.
“It is difficult to claim that the crisis is over when unemployment is at historic highs and getting higher still,”he added.
Further reading/Key links
Protect yourself: Recession-proof your finances