IMF chief warns on exit strategy

Michael Burke: Report in the Financial Times, Monday November 23:

"'Economic stimulus programmes, including those in the UK, should not be withdrawn too soon, Dominique Strauss-Kahn, managing director of the International Monetary Fund, warned on Monday.

He stepped into the intense debate about how quickly to tackle the UK’s £175bn budget deficit by telling the CBI employers group that “this kind of support will have to last some time more until we are sure the recovery is firmly established."

“It is too early for a general exit. We recommend erring on the side of caution, as exiting too early is costlier than exiting too late,” he said.'

He had nothing to say, though, about an economy which had not engaged in any reflation at all, but had only enacted a sharp fiscal contraction.

Posted in: Economics • Fiscal policy

Tagged with: fiscal stimulus • Deflation