IMF chief sees no global recovery before '09

By Steven Scheer and Rebecca Harrison

JERUSALEM (Reuters) - The International Monetary Fund (IMF) does not expect the global economy to recover before 2009 even though a "large part" of the financial crisis may be over, its chief Dominique Strauss-Kahn said on Wednesday.

"It's too early to know if the financial crisis is really behind us," Strauss-Kahn told a conference in Jerusalem to mark 60 years since the founding of Israel in 1948.

"Probably a large part of the financial crisis is behind us, but it is difficult to know if everything is behind us," he said during a session on the global economy. "How long will the slowdown last? I don't see a recovery before 2009," he said.

Strauss-Kahn noted that robust emerging markets such as China, India and Brazil were underpinning the global economy, despite a crisis that started in the U.S. subprime mortgage sector -- a problem he said persisted.

Along with the U.S. housing crisis, one of the biggest issues facing policymakers was imbalances between global currencies, with some undervalued and some overvalued. He did not give specifics.

Rising oil, commodity and food prices also remained a drag on the global economy, he said.

European equity markets firmed and the dollar rose broadly on Wednesday as worries about U.S. economic growth eased on the back of better-than-expected U.S. retail sales data and attention turned to inflationary pressures.

But Goldman Sachs senior global strategist Abby Joseph Cohen, also speaking at the conference, echoed Strauss-Kahn's caution, saying "the pain is not over" for the U.S. economy.