IMF Managing Director Rato said Monday that the situation in credit markets is slowly returning to normal. "I think the development of credit markets is correcting, although it is a slow process," de Rato told journalists on the sidelines of a conference.
De Rato was referring to a global credit liquidity squeeze that has resulted from a meltdown in the U.S. subprime lending market. "The IMF continues to think that the crisis is serious," he said.
"Much has to do with the duration of the crisis, because the longer it goes on, the bigger will be its effects," de Rato said. In 2008, de Rato said, global growth "will remain strong, but will be slightly inferior to 2006 and 2007." He also added that the risks to economic growth are on the downside."
The IMF will publish updated estimates for world growth in October.
