IMF: U.S. Faces a Long And Deep Recession

The United States, even with early implementation of recovery plans, is in for a long and deep recession and slow recovery, an International Monetary Fund official said yesterday.

The world also can expect “some period of economic decline,” said Charles Kramer, head of the IMF’s Western Hemisphere division, citing the “very worrisome data coming out of the major countries.”

Kramer spoke to reporters in a conference call from Washington, D.C., about the IMF’s annual Article IV review of Canada’s economy, which it pronounces better placed than other countries to weather the global economic decline.

But Kramer repeated the report’s findings that despite prudent economic management and sound regulation of the financial system, the Canadian economy is “likely to contract significantly in the near term.”

He cited Canada’s dependence on trade, which is sharply falling the world over, and particularly on trade with the United States, which takes 75% of Canada’s exports and where demand is diminishing.

The U.S. outlook, so vital to Canada, “very much depends on a solution to the financial sector problems,” Kramer said. The new recovery plan of the Obama administration and Congress will address the problems but “the key there will be to implement it quickly,” he said.

— Market News International

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