Monday, 17 November 2008

IMF requires $1.2 trillion to boost world economy

Up to two percent of the world's income, or 1.2 trillion dollars, should be spent on reviving the global economy, the head of the Anatomy of a global credit crisis
International Monetary Fund said in Tripoli on Monday.

Dominique Strauss-Kahn, the fund's managing director, called for "massive" and coordinated use of budgetary policy to overcome the crisis.

"It is time to use all instruments," he said at the opening of a conference on economic integration in the Maghreb region, urging a budgetary "push" of two percent of countries' gross domestic product.

On a world scale, this would add up to 1.2 trillion dollars.

"A coordinated budgetary policy sharply increases the effect of the policy," Strauss-Kahn said.

He indicated that he would favour a further interest rate cut by the European Central Bank.

"In Europe, there are still possibities for flexibility" in monetary policy, unlike in countries such as the United States and Japan, he said.

The ECB cut its lead rate by 50 basis points on November 6, to 3.25 per cent.

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