We are still in the economic crisis: IMF chief

Although the global economy got out of the financial crisis, we are still in the economic and social crises, Strauss-Kahn, director general of the International Monetary Fund (IMF) said in an interview to the French daily.

With huge stimulus funds pumped in to the financial sector, we have avoided a repetition of the Great Depression of 1929 and the global economy is taking off again. But we must remain cautious as we expect a global recession of 1.3 per cent in 2009, and let us not believe that the crisis is behind us, the IMF chief said.(See: IMF chief warns of sluggish global recovery)

Strauss-Kahn expects that unemployment, which is a major concern, will not stop until the second half of next year as it would take about a year between a recovery and ending of decline in the labour market.

Armed with an additional $500 billion reserves to assist struggling nations to tide over the global financial crisis, Strauss-Kahn said the fund has established everything that was asked in the April summit of the G20 nations in London.

The IMF chief said that the lender has issued $250 billion worth of Special Drawing Rights (SDR). The fund has improved the terms of lending to emerging and low income countries and would probably lend about four times more to them the current year, compared to 2008.

Strauss-Kahn urged G20 leaders, who are scheduled to meet in Pittsburgh, Pennsylvania during 24-25 September, to resolve further the major issues of financial regulation and governance.