Geithner says need to keep stimulus on

7/11/2009 - 16:14

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ST ANDREWS, Scotland (Reuters) - U.S. Treasury Secretary Timothy Geithner said high unemployment rates show that economic recovery is still perilous and governments need to maintain stimulus as long as necessary to ensure sustained growth.

"If we put the brakes on too quickly we will weaken the economy and the financial system, unemployment will rise, more businesses will fail, budget deficits will rise, and the ultimate cost of the crisis will be greater," Geithner said in a statement issued at the conclusion of a two-day Group of 20 meeting.

He said that with some growth beginning to become apparent in the global economy, policymakers were faced with new challenges but had to avoid taking actions that could snuff out recovery.

"It's too early to start to lean against recovery," Geithner said.

"With growth now underway and the financial fires winding down, the policy challenge is changing. The first stage was the emergency rescue," Geithner said. "The next stage was catalyzing private demand and business investment. This will require continued policy support."

(Reporting by Glenn Somerville and Sujata Rao)

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