Tuesday, March 10, 2009

The IMF uses the words "Great Recession"

The head of the International Monetary Fund is visiting Africa this week. During his visit, Dominique Strauss-Kahn spoke to political and economic leaders about the "Great Recession" that is about to hit Africa's shores.

The global recession which began in the United States is moving to other parts of the world. The underdeveloped world will soon begin to feel the collapse of world trade that has been an effect of this crisis.

From Reuters, writer Lesley Wroughton and George Obulutsa detail Strauss-Kahn's comments on what lies ahead for Africa.

"The IMF expects global growth to slow below zero this year, the worst performance in most of our lifetimes," IMF Managing Director Dominique Strauss-Kahn told African political and financial leaders in the Tanzanian capital.

"Continued deleveraging by world financial institutions, combined with a collapse in consumer and business confidence is depressing domestic demand across the globe, while world trade is falling at an alarming rate and commodity prices have tumbled," Strauss-Kahn added.

As advanced countries focus on problems in their own economies, Strauss-Kahn called on the international community not to forget Africa, where regional growth is expected to slow sharply to 3 percent this year, half the rate of the past five years.

That forecast may "even be too optimistic", he said.

"Even though the crisis has been slow in reaching Africa's shores, we all know it is coming and its impact will be severe," he said. "We must ensure that the voices of the poor are heard. We must ensure that Africa is not left out," he added.

The IMF chief warned that millions of people in Africa will be thrown back into poverty by the crisis, while fragile political systems will be tested.

"This is not only about protecting economic growth and household incomes - it is also about containing the threat of civil unrest, perhaps even war. It is about people and their futures," he added.

Related Video

No comments: