Trade News

IMF head: More global government stimulus needed

It will take approximately $1.2 trillion in global government spending to stimulate the world’s financial crisis, according to the head of the International Monetary Fund (IMF).

Dominique Strauss-Kahn told the BBC that the most recent round of stimulus measures by the group of 20 nations is not going to be enough, and what is needed is government spending on par with two percent of global Gross Domestic Product ($1.2 trillion).

It would seem Japan is already heeding this advice, approving another $54 billion stimulus package on top of the $255 billion it passed last week. The Bank of Japan cut its benchmark interest rate to 0.1 percent on Friday, the BBC reported.

Japan is the world’s second largest economy, yet the most indebted among developed nations, and is forecasting no growth through March 2010.
The IMF’s Strauss-Kahn told the BBC that government stimulus spending is the “less bad solution” for the coming year’s global recession.

“We are facing something which is almost unknown," he said.