Double-Dip Recession Still in Frame: Strauss-Kahn


The possibility of a double-dip recession is still there although it is not the main scenario envisaged by the International Monetary Fund and governments should not rush to exit economic stimulus packages, IMF Managing Director Dominique Strauss-Kahn told CNBC Friday.

The global economy is recovering but unemployment usually lags recoveries by 10 months if not more and "we shouldn't be too optimistic," Strauss-Kahn told "Worldwide Exchange."

"Moreover there are some possibilities of a double dip. It's not the main scenario in which we believe but it may happen," he added.

Strauss-Kahn said he was afraid that in August, when the first good news started to trickle in, that governments would say it was time to start unwinding the stimulus but that would have been too early.

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"I'm now heartened, I know that we will go on pushing the public support to demand until private demand will take over. I'm reasonably confident… that growth will resume," he added.

Countries exiting the stimulus strategies on their own, without coordinating for an international response, pose "a big risk," according to Strauss-Kahn, who said exit strategies must be coordinated "as much as possible."