Nila Sweeney

By Robert Carry

The International Monetary Fund (IMF) has warned national governments against moving to cut stimulus measures introduced to combat the financial crisis too early, saying the global recovery could be 'sluggish'.

In its latest report to the Group of 20, the IMF said, "The timing of exists should depend on the state of the economy and the financial system, and should err on the side of further supporting demand and financial repair."

The call comes after the Australian Government began to reign in stimulus spending by trimming $250m from its $2.7bn insulation program ahead of the Reserve Bank's meeting on interest rates last week.

The IMF also urged governments to curb national deficits as a matter of priority.

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