The International Monetary Fund (IMF) said on Wednesday that the global economy is beginning to pull out of the worst recession since the end of the World War II, but stabilization is uneven and the recovery is expected to be sluggish.

It also said the risks to the global financial system have moderated from the extreme levels identified in the April 2009 Global Financial Stability Report (GFSR), but vulnerabilities remain and exit strategies from the financial support policies need to be considered.

“The global financial conditions have improved, as unprecedented policy intervention has reduced the risk of systemic collapse and expectations of economic recovery have risen,” the IMF said in its updated GFSR.

The interventions undertaken by central banks and governments worldwide have reduced the tail risk of another systemic failure similar to the collapse of Lehman Brothers, it said.

However, the financial sector continues to be dependent on significant public support, resulting in an unparalleled transfer of risk from the private to the public sector.

“Work will need to begin on exit strategies from the various financial, monetary, and fiscal support policies in order to address market uncertainty,” the Fund said. “Medium-term policies need to ensure that steps taken to normalize policies and markets are consistent with establishing a lasting framework of sound financial regulation, sustainable fiscal balances, and the maintenance of price stability.”

The IMF suggested that at this critical stage of emerging from the crisis, policy makers need to safeguard the gains made thus far. Both the unprecedented scope of the crisis and the measures taken to contain it will require a comparable policy response.

VietNamNet/Xinhuanet