Many advanced economies are close to or moving into recession, the IMF says and called for strong and co-ordinated actions to avoid worse-case scenarios.
Many advanced economies are close to or moving into recession, the IMF says in its latest World Economic Outlook. The world economy is experiencing a major downturn in the face of the most dangerous financial shock in mature markets since the 1930s, the IMF warned and called for strong and co-ordinated actions to avoid worse-case scenarios.
"The world economy has entered a major downturn after being hit by two very large shocks: a surge in oil and commodity prices and the expanding financial crisis," said IMF Chief Economist Olivier Blanchard. "It is too late to avoid a slowdown, but strong and co-ordinated policies can avoid even worse scenarios. In many countries, plans are already being put in place to help resolve the crisis."
On the financial side, "this implies the design of comprehensive programs to deal with systemic problems," while on the macro-economic side, "this implies the use of monetary and fiscal policies to support growth and break negative feedback loops between the financial and real sectors," he said.
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