2009 will be a really bad year: IMF chief

Source: Times of India
March 21, 2009

International Monetary Fund Chief Dominique Strauss-Kahn has said the level of debt in the UK is "disturbing" but more government borrowing
is necessary to stimulate growth.

The level of debt in the UK is "disturbing," but given the severity of the economic downturn, more government borrowing was the lesser of two evils, Dominique Strauss-Kahn said in an interview to the BBC.

He warned that 2009 would be "a really bad year". "I'm specially concerned by the fact that our forecast, already very dark... will be even darker if not enough fiscal stimulus is implemented," he said in an interview.

Strauss-Kahn said: "More state spending was necessary to stimulate growth" and governments around the world had no choice but to step in and spend more.

Public debt has risen to 650 billion pound, 44.2 per cent of UK gross domestic product. Consumer debt is more than 1.4 trillion pound.

He added that a stimulus equivalent to about 2 per cent of global GDP or about USD 1.2 trillion is required to make a real difference to the crumbling economy.

"The problem is that all the whole society is going to suffer," he added.