John Murray, a deputy governor of the bank of Canada, yesterday warned that global GDP could contract by 8% – $6 trillion – by 2015, if countries do not address the "urgent need to rotate global demand" in the correct way.

Murray told an audience in Washington, DC, that fiscal consolidation is needed in most advanced economies: while many require greater household and bank deleveraging, and some will require structural reforms to promote growth.

He challenged emerging market economies to rely