The macroeconomic effects of the global crisis in financial markets will be serious and no regions will escape entirely unscathed, the chief of the International Monetary Fund (IMF) said on Wednesday.
IMF Managing Director Dominique Strauss-Kahn, who is on a three-day visit to India, said in a speech authorities should respond to any downturn through a mix of fiscal and monetary policy to sustain domestic demand. Strauss-Kahn said the world economy had entered a difficult phase with the financial crisis spreading to the real economy.
"I believe that the effects will be felt increasingly in Europe and I do not think the emerging economies are immune from the crisis," he told a meeting organised by a leading Indian economic think-tank. "This has become a global problem that requires a global solution. Emerging markets need to join industrial countries in the macroeconomic and regulatory policy responses.