October 3, 2009

IMF considers tax on financial sector

The financial sector could be taxed to prevent another severe economic downturn, the head of the International Monetary Fund said in Turkey.

Having some money coming from the financial sector to create a kind of fund for insurance or funding for low-income countries is something that we are going to consider, Dominique Strauss-Kahn said Friday in Istanbul before the IMF-World Bank annual meeting.

Strauss-Kahn predicted global growth will return at a lower level than before the crisis and warned against jettisoning a stimulus strategy too early, The (London) Independent reported Saturday.

Addressing the effects of the downturn on the Caucasus and Central Asia, IMF Director Masood Ahmed said the region likely would see growth drop from 6.6 percent in 2008 to 1.5 percent in 2009.

The region as a whole should see a modest recovery in 2010, although the degree of the upturn will vary among countries, Ahmed said in a release Saturday. Energy importing low-income countries, such as Armenia, Georgia and Tajikistan, still face a difficult year ahead, Ahmed said.