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No Double Dip, Stimulus Did Help: IMF Chief

CNBC.com
Monday, 13 Sep 2010 | 9:50 AM ET

There is unlikely to be a double-dip recession, while the fact that stimulus spending was helpful in containing the crisis is undisputable, Dominique Strauss-Kahn, managing director of the International Monetary Fund (IMF), told CNBC Monday.

IMF Managing Director Dominique Strauss-Kahn
Mandel Ngan | AFP | Getty Images
IMF Managing Director Dominique Strauss-Kahn

The US has taken the correct approach in dealing with the economic slowdown and making sure the recovery is sustainable, Strauss-Kahn added.

"It's not our baseline. We don't believe that the double dip will take place," he said. (Click here for the full interview)

Fears of a double dip have increased recently, with some analysts saying austerity in Europe could sink the world into a second recession.

Stimulus spending was the key for containing the crisis, according to Strauss-Kahn.

"The fact that the stimulus was absolutely useful is not challenged by anyone now," he said.

"I think what the US is doing today is the right thing. I think as long as they will support (the recovery), finally it will pick up and create jobs," Strauss-Kahn added.

But the effect of the US policy will not be immediate, he said.

"We need to wait for one or two quarters to be sure," according to Strauss-Kahn.

Some officials and analyst said that financial markets' lack of supervision and risky bets have caused the crisis.

"Blaming the markets doesn't make a lot of sense," Strauss-Kahn said.

Regulators need to put in place better rules and supervision to make sure markets are effective, he added.

Strauss-Kahn did not want to respond to speculation that he was looking for a political position back in France.

"We're working in the direction of finding jobs for those who don't have a job. I have a job," he said.

Contact Europe: Economy

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