The International Monetary Fund (IMF) chief Dominique Strauss-Kahn said here Saturday he expected a "serious slowdown" in the U.S. economy.

"Whatever the answer is on a recession, what is clear is there will be a serious slowdown" in the United States, the managing director of the IMF told a panel at the annual meeting of the World Economic Forum. He called for a serious response.

As 2,500 political and business leaders gathered at the Swiss skiing resort of Davos, the meeting was clouded by mounting concern over the U.S. economic outlook in the aftermath of the sub-prime mortgage market crisis, with some economists even warning the U.S. economy is headed for a recession.

Strauss-Kahn said the IMF was scheduled to update its economic forecasts next week, which is certain to have a lower growth figure for the U.S.

IMF spokesman Masood Ahmed told reporters Friday that they saw a period of below-potential economic growth for the U.S., saying the recent sharp interest rate cut by the U.S. Federal Reserve was appropriate and helpful.

"We still see a period of below-potential growth as the most likely scenario for the U.S. given the economy's good starting position," Ahmed said.

Strauss-Kahn said the priority now is to correct malfunctioning of financial markets and restore economic confidence.

He urged central banks to continue to provide liquidity to the markets as they have done since last summer, when the sub-prime mortgage market crisis in the U.S. soon spread globally and caused widespread credit crunch in world major financial markets.

In a rare occurrence, Strauss-Kahn advised those countries with low fiscal risks to resort to fiscal policies, in combination with monetary policy.

"At least the economies with low fiscal risks have to be prepared for fiscal policies," such as the U.S. stimulus package of tax cuts, Strauss-Kahn said.

The IMF unusually encourages members to pursue fiscal consolidation and contain deficit level.

With a major downturn predicted for the U.S. economy, the world's largest economy, the whole world was feared to be dragged down.

As to emerging economies, taken by some as a substitute support of the world economy, Strauss-Kahn said though they would largely perform well, it was unlikely for them to be immune from the U.S. slowdown as their links with the U.S. economy do exist.

Editor: Yan