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IMF: Unemployment to keep rising at least for another year

08 September 2009 14:18 (UTC +04:00)

BakÄ± - APA-Economics. A recovery of the world economy might occur three months earlier than had been expected, at the beginning of next year, the head of the IMF said on Tuesday.
But the rebound would be "weak," the managing director of the International Monetary Fund, Dominique Strauss-Kahn, told the newspaper Il Sole 24 Ore in an interview.
"For a year we’ve been saying that the recovery might take place in the first half of 2010. Perhaps it will be brought forward by a quarter and that would be good news," he said.
He also foreshadowed an upward revision of the IMF’s outlook for the world economy.
"The World Economic Outlook which we are preparing to publish will be better, but it won’t be very different from the one in July," he said in an interview with the paper.
"The progress we have noted can be explained by various factors including the re-building of stocks (company inventories) and economic policy measures to support economies," he said, but also observed that the effects "will not last long."
Strauss-Kahn said that he was now sure that the depths of the financial crisis, and the risk of another key finance house collapsing as Lehman Brothers had done a year ago, are "behind us."
"We are seeing the end of the tunnel but we are still in a crisis," he said. This was because "the real problem is the social consequences, such as unemployment which is going to continue rising at least for another year."
He said that the economic outlook for Italy would improve but that Italy, like other European governments, had to pursue structural reforms.
This was because an improvement in growth of 0.3 percent, for example, was "better but it doesn’t change much" and that it would be mainly the consequence of activity in big European economies. Source: AFP