The head of the International Monetary Fund warned today that the global financial crisis could still drive a vicious circle of rising unemployment, greater poverty and prolonged civil unrest and wars among poorer nations.

In a speech to the Global Creative Leadership Summit in Washington, Dominique Strauss-Kahn said: "We can see light at the end of the tunnel even if the crisis is by no means over. We are now forecasting a global recovery in the first part of 2010.

But he added: "Even if growth recovers, it might still take some time for employment to follow. In many countries, particularly those without adequate social safety nets, poverty will persist. And with this comes risks to social stability.

"The stakes are particularly high in the low-income countries, where populations are especially vulnerable. Two dramatic shocks in rapid succession — the food and fuel price shock and the global financial crisis — caused fortunes to be reversed. And it’s not over — East Africa is now being hit hard by a devastating drought. The consequences could be disastrous.

"Our colleagues at the United Nations and World Bank think that up to 90 million people might be pushed into extreme poverty as a result of this crisis."

He added: "Economic marginalisation and destitution could lead to social unrest, political instability, or a breakdown of democracy. We could see war. This is what we must avoid."

Mr Strauss-Kahn said the IMF was delivering "support to low-income countries over the next year or two will be three times what was available before the crisis. And to ease the burden, we will charge zero interest on all concessional lending through 2011."

Using the example of the Bretton Woods summit after the Second World War, which led to the creation of the IMF and unprecedented stability, he said: "When the nations of the world come together to address common challenges in a spirit of solidarity, we can attain a virtuous cycle of peace and prosperity, and avoid a vicious cycle of conflict and stagnation."

He said that the IMF had played a key role in pulling the world back from the worst economic crisis since the Great Depression.

"As we look at the current global financial crisis, the worst since the Great Depression, the risks were incredibly high. The global economy could have faced a meltdown. But we pulled back from the brink, and the IMF certainly played its role. Even if it is too early to declare victory, we did what the founding fathers expected of us. And to quote Robert Frost, that has made all the difference."

Explore Economics

• Pre-Budget Report 2009

• Budget 2009

• World Economic Forum

• The Times MPC

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive