IMF chief warns of double dip recession

THE head of the International Monetary Fund (IMF) has warned that the global economy could suffer a double dip recession.

Dominique Strauss-Kahn said countries should not ditch stimulus packages that have triggered growth through governments' pumping of money into economies.

He warned: "We have to very cautious because this recovery remains very fragile.

"Recovery in advanced economies has been sluggish. The best indicator is private demand and employment.

"In most countries, growth is still supported by government policies. For as long as you do not have private demand strong enough to offset the need of public policy, you shouldn't exit."

He added that tackling high levels of government debt will be a priority for many governments.

Strauss-Kahn indicated that the IMF would raise its growth forecasts for this year.

The IMF is predicting the global economy will grow by 3.1 per cent in 2010.