Global Forecasts

compare annuitiesInternational Monetary Fund is cutting its global economic forecasts yet again, calling the risks of a slowdown “alarmingly high,” primarily because of policy uncertainty in the United States and Europe.

Christine Lagarde, managing director of International Monetary Fund, and Ioannis Stournaras, the Greek finance minister. The fund called on European policy makers to help countries having trouble finding reasonable rates in debt markets.

It foresees global growth of 3.3 percent in 2012 and 3.6 percent in 2013, down from 3.5 percent this year and 3.9 percent next year when it made its last report in July. New estimates suggest a 15 percent chance of recession in the United States next year, 25 percent in Japan and above 80 percent in the euro area.


The latest report focused on the higher-income countries whose political and economic troubles are posing significant risks to the rest of the world. The fund estimated that these advanced economies, including the United States and Germany, would grow about 1.3 percent this year, down from 3 percent in 2010.


The fund does not expect growth to pick up much next year, either, forecasting growth of just 1.5 percent, in those countries.


“Low growth and uncertainty in advanced economies are affecting emerging market and developing economies through both trade and financial channels, adding to homegrown weaknesses,” Olivier Blanchard, the fund’s chief economist, said.

Full Article at NY Times


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