By DPA,
Washington : The International Monetary Fund has sought to put a positive spin on the current financial turmoil in the US, predicting the world’s advanced economies will stage a slow recovery by 2009 even as financial firms face potential bankruptcy.
“While the events of the past week underscore the seriousness of the situation, my message today is straightforward: this storm can be weathered without a damaging global recession,” IMF Deputy Managing Director John Lipsky said Thursday in Washington.
“The most likely outcome is that the financial turmoil still underway in many advanced economy markets will not by itself prevent a gradual recovery in economic activity in 2009,” Lipsky said.
This week has seen Wall Street stocks plunge as Lehman Brothers Holdings Inc declared bankruptcy and US insurance giant American International Group Inc (AIG) was effectively taken over by the US government.
Lipsky called the week’s events “the latest searing manifestations of a financial crisis that has expanded suddenly to historic proportions.” The turmoil will lead to a much more gradual economic recovery than would have been the case otherwise, he said.
The IMF predicts global growth of about 4 percent this year, and slightly lower growth for 2009.