IMF: World on brink of recession; prepares special loan program

October 9, 2008



The head of the International Monetary Fund (IMF) says the world is on the brink of a global recession but predicts the economy will begin to recover by late 2009.

, Managing Director of the IMF, stressed nations must work together to avert a global recession and warns there is "no domestic solution" to the crisis. He also said this week's coordinated interest rate cuts around the world are a good example of the international cooperation needed to restore faltering economies.

Furthermore, he announced the IMF has activated an emergency program Wednesday that allows the fund to provide loans more easily and quickly to emerging countries in economic trouble. This program was first used during the.

The program might be used in Iceland, which has seen major problems hitting the financial sector. Iceland has been forced to nationalize the three largest banks and, most recently,.

The IMF chief made these remarks in on Thursday, as top officials from IMF nations and the G-7 industrialized countries are gathering for meetings on economic issues. U.S. President is set to meet with G-7 finance ministers at the White House on Saturday.