Finance ministers see signs the global economy is stabilizing but caution it will take until the middle of next year for the world to emerge from the worst recession in decades. During a day-long session Saturday of the International Monetary Fund's policy-steering committee, many ministers said stimulus packages, bank recapitalization and other actions taken by governments and central banks to deal with the crisis are beginning to show results. Egyptian Finance Minister Youssef Boutros-Ghali, who chairs the committee, summed up the mood at a news conference, saying “we can see a break in the clouds.” He said some financial markets are trending up and other economic indicators are positive but warned of “downside risks.” “Things will continue looking negative for a while but at a lesser and lesser pace,” Boutros-Ghali said. “Toward the end of the year, we will start seeing the light, start seeing movement toward stabilization and then recovery.” Last week, the IMF said the global economy is likely to shrink by 1.3 percent this year, the first such decline in six decades. More assessments of the global economic situation are expected Sunday when the World Bank's policy-steering committee meets. IMF Chief Dominique Strauss-Kahn said ministers expressed satisfaction with the measures various governments took to stimulate their economies. He called early disagreements over the extent of spending needed as childish. He said there was a general agreement that a global economic recovery depends on “the absolute necessity of cleansing the financial system” of bad debts or toxic assets on many bank balance sheets. Such a step is expected to unfreeze credit markets.
