IMF’s head says world economy "not out of woods"

* Global economy “not out of the woods” -IMF head

* Risks posed by earlier than expected global recovery

By Suleiman al-Khalidi

AMMAN, April 4 (BestGrowthStock) – International Monetary Fund head
Dominique Strauss-Kahn said on Sunday the world economy was not
“out of the woods” despite a faster recovery in developing and
emerging countries than earlier forecast.

He told reporters during a visit to the country that
although global recovery was “resuming sooner than expected,
private demand was still not strong enough to signal the end of
the prolonged recession experienced by the world economy.

“You see growth resuming almost everywhere but that almost
everywhere these growth figures are related to public support
and private demand remaining rather weak and not strong enough.
Until private demand is sustainable to provide growth it will be
difficult to say the crisis is over,” he added.

The IMF sharply raised its estimates back in January,
predicting that the world economy would expand by 3.9 percent in
2010, much higher than the 3.1 percent it projected last
October, with the pace picking up to 4.3 percent next year.

“The recovery is coming sooner than expected. But we are not
out of the woods and we have to be cautious,” he added.

Predictions for recovery have been improving steadily since
last year in tandem with an explosive stock market recovery.

But much of the U.S. economy’s recovery from the most brutal
downturn since the 1930s has been driven by government stimulus
and businesses being less aggressive in reducing inventories.

This has raised concerns that growth could stutter later
this year when the boost from the two sources fades, given tepid
consumer spending and high unemploymment.

Strauss-Kahn, a former French finance minister, said that
although a double dip could not be ruled out, the IMF did not
forecast one.

The head of the IMF refused to be drawn into commenting on
the next World Economic Outlook before it was released in “ten
days” he said.

Strauss-Kahn also warned of the risks in a premature
recovery that could prompt governments to retreat from public
stimulus policies too early and thus “shooting themselves in the
foot”.

Along with concerns over sovereign debt in the euro zone,
Strauss-Kahn added that a third risk was the “huge amount of
capital inflows that could go to countries such as Brazil and
Indonesia that would create bubbles”.
Penny Stocks

(Writing by Suleiman al-Khalidi; Editing by Mike Nesbit)

IMF’s head says world economy “not out of woods”