“While the recovery is underway, it is not the recovery we wanted,” Strauss-Kahn said in a speech at the Monetary Authority of Singapore. “It is a recovery beset by tensions and strains – which could even sow the seeds of the next crisis.”
He said two main dangers have emerged out of the recovery: imbalances between countries; and imbalances within countries.
“We see a worrying development: the pre-crisis pattern of global imbalances is re-emerging. Growth in economies with large external deficits, like the U.S., is still being driven by domestic demand. And growth in economies with large external surpluses, like China and Germany, is still being powered by exports. As the IMF warned in the years leading up to the crisisand as the G-20 has emphasizedthese global imbalances put the sustainability of the recovery at risk,” Strauss-Kahn said.