The world economy could return to growth by the end of this year after being hit hard by the financial crisis, a senior official of the International Monetary Fund (IMF) said on Saturday.

"We believe that with the adequate policy response ... the world economy can return to growth by the end of this year and to trend growth in 2010," John Lipsky, first deputy managing director of IMF told delegates at the World Economic Forum in the Swiss ski resort of Davos.

He said the IMF will need at least another US$500 billion to expand its capital basis as more countries may rely on its support to tide over the economic turmoil.

Speaking at the same panel discussion, Bank of Canada Governor Mark Carney said he was more optimistic than a IMF forecast for next year, based on reason that the stimulus programs installed by various governments may take effect.

The latest IMF forecast on Wednesday said the world economic growth is projected to plummet to 0.5 percent in 2009, the lowest in 60 years, before rebounding to 3.0 percent in 2010.

French Finance Minister Christine Lagarde warned that the world economic crisis could provoke "social unrest."

"Social unrest and protectionism are the two major risks of the world economic crisis," she said, adding that the risks were increased by "having to engage taxpayers' money and by hampered growth."

She urged world governments to take decisive actions before the leaders of the Group of 20 nations (G20) are due to meet in London in April, a follow-up to their first summit on the financial crisis in Washington last November.

"We need to give an extremely strong signal as early as April 2 at the G20 meeting in London to restore confidence in the system," she said.

Meanwhile, Carney warned that banks have so far underestimated the commitments made by governments to calm down the financial markets, making the bailout efforts less effective.

"They are heavily, too heavily discounting the very clear commitment from the G7 that no systemically important institution will be allowed to fail. That is the first line of the Oct. 8 communique which was literally typed in by the G7 finance ministers themselves," he said, "The power of that and the degree of commitment to that has been underestimated."

(Xinhua News Agency February 1, 2009)