Washington (Platts)--9Oct2008

The world economy is "on the cusp of a global recession" and countries
will need to actively cooperate to solve the crisis, the head of the
International Monetary Fund said Thursday.

"There's no domestic solution to a crisis like this one," said IMF
Managing Director Dominique Strauss-Kahn. "All countries have to be involved
in the solution."

In energy, industry sources and analysts have said that the current
financial crisis is expected to tighten credit markets for the energy
industry, possibly holding up planned capital investments, and reduce demand
for fuels and electricity.

Strauss-Kahn's comments came at the beginning of the annual meetings of
the IMF and the World Bank Group in Washington Thursday.

Strauss-Kahn noted that recovery would come in less than a year. "The end
of 2009 is where the recovery will appear," he said.

Emerging markets will continue to grow, albeit at a slower pace, he said,
but developed countries including the US and many EU members will see zero
combined growth.

He warned that countries with emerging markets such as Brazil and China
should not assume that they will not be affected.

"There is no part of the world being immune," he said. For these rapidly
developing countries, they must now look to supply their own domestic markets
more and not seek to export as much as they have been, he said.

Strauss-Kahn also took a moment to address rising food and fuel prices
which he called "the other crisis" amidst other negative economic signs. "Our
concern today is inflation," he said. "Inflation hurts the poor first."

Reform in the financial sector globally must be a priority for every
country and he pledged that his organization would help in that effort.

"You need to reform how the financial sector works," he said, pointing to
recapitalization, financial market discipline, strengthening regulatory
agencies, closing loopholes and providing more transparent data.

--Alexander Duncan, alexander_duncan@platts.com