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Friday, 10 October 2008

Crisis to dent China, Brazil growth - IMF chief

WASHINGTON, Oct 9 - China will not be immune from the global financial crisis but its overall rate of growth should remain high, IMF Managing Director Dominique Strauss-Kahn said on Thursday.

"It would be very surprising if a power like China would just be looking at the crisis from a balcony without being very concerned," Strauss-Kahn told a press conference ahead of the fall meeting of the International Monetary Fund and the World Bank.

"Nonetheless, rate of growth will remain very high," Strauss-Kahn said, adding it was important that China continue to shift its economy to one fueled more by domestic demand than by exports.

Brazil, another fast-growing economy in recent years, will also take a hit from the crisis but its strong economic fundamentals will help it weather the storm, he said.

Strauss-Kahn conceded that governments and international policymakers had done a poor job of forecasting the extent of the financial woes now facing the world.

"I think it is fair to say that all of us have underestimated the strength of the financial crisis ... What appears is the roots of this crisis are deeper than expected," Strauss-Kahn said.

However, the IMF forecasts global recovery should begin near the end of 2009, he said.

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