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Tuesday, January 13, 2009
IMF Chief: Global Slowdown Will Get Worse
Associated Press
BUDAPEST, Hungary--The International Monetary Fund is predicting a deepening slowdown in global growth in 2009, the organization's director said Tuesday during a visit to Hungary.
An IMF study to be released soon will show a sharp decrease in its forecasts for global growth compared with predictions made in October.
"The world economic outlook for 2009 will not look good," IMF Managing Director Dominique Strauss-Kahn said after meeting with Hungarian Prime Minister Ferenc Gyurcsany and other government officials.
Strauss-Kahn did not mention any specific figures on how much slower the global economies were expected to be.
He said Hungary is adhering to pledges of reforms and austerity measures made last year when it received a huge financial
bailout.
Hungary is doing "as well as possible in a difficult world," Strauss-Kahn said. "I want to commend the government for what has been done."
Strauss-Kahn also urged Hungary to continue with structural reforms so that it is ready for the economic turnaround and can achieve sustained growth when it happens.
Hungary received a $25.1 billion standby loan in October from the IMF, the World Bank and the European Union after investors lost confidence in the country's ability to make debt payments.
Strauss-Kahn said Hungary was right to appeal to the Washington-based IMF and the other institutions for help at a "very early" stage, adding that the country's end-2008 macroeconomic figures were in line with IMF expectations.
Hungary's currency slumped to near all-time lows against the euro Monday and early Tuesday reportedly because of market rumors that Strauss-Kahn's visit was necessary because Hungary was straying from the measures agreed to with its international lenders.
Asked about the forint, Strauss-Kahn said he felt that the measures taken in the last months by the government with IMF and EU support had helped to stabilize the currency.
"So, beside a general issue of volatility of the exchange rate, I don't see any reason to worry about the forint today," Strauss-Kahn said.
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