Markets to Fall 20% More at Most: IMF Economist

In a worst-case scenario, markets could fall at most another 20 percent but there is “practically zero” chance of another Great Depression, the International Monetary Fund’s chief economist Olivier Blanchard was quoted as saying on Saturday.

“In a worst-case scenario, governments will need a few more weeks to take the correct measures and the markets could fall another 20 percent. Then, we’ll turn around,” Blanchard was quoted as saying in Italian daily Corriere della Sera.

In Italy, the probability was greater because the euro zone economy was already lagging before the crisis.

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He said 100 percent of global growth in 2009 was expected to come from emerging economies and added China would find itself in a stronger position as a result.

“The emerging nations will grow 6 percent next year and that will have political implications. One hundred percent of growth in 2009 will come from them,” Blanchard was quoted as saying.

“There will be a shift in power. China will emerge from these events in a stronger position.”