IMF: Recession's Worst Not Over

The head of the International Monetary Fund (IMF) says the world economy hasn't seen the worst of the recession. Among the factors influencing this observation:

The recession has claimed a record number of jobs in Europe. The 16-country euro zone lost a record 1.2 million jobs in the first quarter, reports show. The number of employed fell 1.2 percent year-on-year, the deepest annual drop since measurements started in 1995.

The factory sector in New York state shrank at a more severe rate in June than the previous month, the New York Federal Reserve says in a report on Monday.

The New York Fed's "Empire State" general business conditions index fell to minus 9.41 in June from minus 4.55 in May. The survey of manufacturing plants in the state is one of the earliest monthly sign posts to U.S. factory conditions.

Other signs of the fragile state of the global economy: China would not see a rapid rebound and South Korea's finance minister says its economy was still sliding, although the pace had slowed.

But in southern Italy, Group of Eight finance ministers meeting over the weekend describe their economies in the most positive terms since the collapse of U.S. bank Lehman Brothers last September.

Pressure has been building in the G8, increasingly from fiscally conservative nations Germany and Canada, for plans to wind down stimulus as soon as it is no longer needed. But many G8 ministers are at odds over how quickly to start rolling back state spending plans and hiking interest rates.

Treasury Secretary Timothy Geithner indicates the United States isn't likely to tighten policy soon. Writing in an op-ed piece in the Washington Post on Monday, Geithner says a sweeping financial regulation reform plan to be released this week would target capital requirements, securitization and other problem areas blamed for the global financial crisis. The largest and most interconnected firms could expect to face more stringent requirements.

About the Author

Linda McGlasson

Linda McGlasson

Managing Editor

Linda McGlasson is a seasoned writer and editor with 20 years of experience in writing for corporations, business publications and newspapers. She has worked in the Financial Services industry for more than 12 years. Most recently Linda headed information security awareness and training and the Computer Incident Response Team for Securities Industry Automation Corporation (SIAC), a subsidiary of the NYSE Group (NYX). As part of her role she developed infosec policy, developed new awareness testing and led the company's incident response team. In the last two years she's been involved with the Financial Services Information Sharing Analysis Center (FS-ISAC), editing its quarterly member newsletter and identifying speakers for member meetings.

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