INTERVIEW - IMF's Lipsky sees sluggish global econ recovery

By Martin Dokoupil

DUBAI (Reuters) - The global economy is heading toward a sustained recovery but given the risks of another downturn it is too soon to withdraw stimulus, International Monetary Fund Deputy Managing Director John Lipsky said on Friday.

"We think that we are on a trajectory towards sustained growth but that the recovery is going to be relatively moderate and relatively sluggish," he said in an interview on the sidelines of the World Economic Forum in Dubai.

"At the same time you cannot discard the risks that there could be a new stagnation."

Concerns about a rebound in world economic growth has gripped global markets in recent days, amid rising U.S. unemployment and worries some European economies may slip deeper into recession next year.

The IMF has urged countries to refrain from slashing extraordinarily lax policies in what is referred to as an "exit" strategy.

Lipsky said while it was time to think about withdrawing the stimulus, no action should be taken yet and governments should implement any additional stimulus already pledged for 2010.

He also said that the dollar was still a bit stronger on a multilateral, medium term equilibrium basis, while many Asian currencies were undervalued.

"The dollar is a bit on the strong side but not far from where it should be," Lipsky said.