The head of the International Monetary Fund says the world economy is likely to shrink this year, in what some are referring to as the "Great Recession."

IMF Managing Director Dominique Strauss-Kahn told a conference in Tanzania Tuesday that sharp declines in world trade are likely to hurt African economies.   

Meanwhile, the chairman of the U.S. Federal Reserve, the U.S. central bank, warns that a sustainable economic recovery will "remain out of reach" without a comprehensive overhaul of financial regulations.

Fed Chairman Ben Bernanke says officials, both in the United States and around the world, will fail if they only focus on strengthening regulations for certain sectors of the economy, like banking.

Bernanke's comments come as U.S. lawmakers start work on legislation aimed at enhancing financial regulations and as key financial officials get ready to meet in London ahead of next month's summit of the world's 20 major economic powers - the G-20.

European Union financial officials preparing for the April summit have already decided the IMF should get more money to bail out countries facing economic crises.

In a document released Tuesday, the EU backed calls to double the IMF crisis fund to $500 billion, suggesting some of the money could come from countries like China and Saudi Arabia, which have built up substantial currency reserves.

However, the document also exposed some disagreements with the U.S.

EU officials rejected the idea of expanding economic stimulus measures, something the U.S. supports.

A World Bank study Sunday said the global economy will shrink in 2009 for the first time since World War II, while world trade is declining at the fastest rate in 80 years.

Some information for this report was provided by AP and Reuters.