TOKYO — The head of the IMF said China and other developing Asian economies are leading a global recovery that is faster and stronger than expected but warned that money rushing into emerging markets could lead to asset bubbles.
Dominique Strauss-Kahn, the managing director of the International Monetary Fund, strongly suggested Monday that the IMF would raise its 2010 global growth forecast from the 3.1 percent it projected in October.
China, India and other emerging Asian economies were close to returning to their pre- crisis growth rates, while rebounds in the U.S., Japan and other advanced economies remained “sluggish,” he said.
“The forecasts we’re going to release in a couple of days will show that this recovery is going faster and stronger than we expected” several months ago, Strauss-Kahn told reporters in Tokyo.
While the IMF doesn’t forecast a “double-dip,” or second recession, risks remain, he said.
“We have to be very cautious because this recovery remains very fragile,” he said.
While hundreds of billions in stimulus spending by governments around the world avoided another Great Depression, he said, the most important risk facing the global economy is deciding how and when to reverse those policies.
