IMF boss says further pain may lie ahead

DOMINIQUE Strauss-Kahn, the head of the International Monetary Fund (IMF), has spoken out after recent reports of &ldquo;green shoots&rdquo;, warning the worst of the global financial crisis may not yet be behind us.<br /><br />Speaking on a visit to Kazakhstan, he said the IMF needed to be cautious about calling an economic recovery, although he said there were signs the world was beginning to exit the recession. &ldquo;We see, at the IMF, a recovery towards the beginning of 2010,&rdquo; he added.<br /><br />In a separate report on the US economy, the IMF lowered its forecasts for how much the world&rsquo;s biggest economy will contract this year from 2.8 per cent to 2.5 per cent. <br /><br />But it warned the US may struggle to end its extensive fiscal stimulus measures and warned massive borrowing could &ldquo;stoke concerns&rdquo; about inflation, thereby pushing up interest rates and hindering a recovery. <br /><br />Meanwhile, British employers&rsquo; organisation the CBI said it didn&rsquo;t think the economy would grow this year and that the Bank of England might have to further extend quantitative easing. <br /><br />It said the UK&rsquo;s gross domestic product will fall by 0.3 per cent over this quarter, by 0.1 per cent in the third and that the economy will stop shrinking finally in the last quarter of 2009. <br /><br />Vince Cable, the Liberal Democrat Treasury spokesman said: &ldquo;It would be foolish to talk about a recovery in the traditional sense because the banks are still not working properly. There are also new threats ahead, potentially including inflation because of rising oil prices.&rdquo;<br /><br />And respected Deloitte economist Roger Bootle said yesterday the economy will contract four per cent this year and then also shrink by one per cent in 2010. He added: &ldquo;It&rsquo;s looking more and more like the 1930s.&rdquo;