Bleak vision of global expansion
Source: Agencies |
October 10, 2012, Wednesday
|
Print Edition
Print Edition
PLAGUED by uncertainty and fresh setbacks, the world economy has weakened further and will grow more slowly over the next year, the International Monetary Fund said yesterday in its latest forecast.
Advanced economies are risking recession, the IMF said in a quarterly update of its World Economic Outlook, and the malaise is spreading to more dynamic emerging economies such as China.
The IMF forecasts that the world economy will expand 3.3 percent this year, down from the estimate of 3.5 percent growth it issued in July.
Its forecast for growth in 2013 is 3.6 percent, down from 3.9 percent three months ago and 4.1 percent in April.
Underpinning that bleaker scenario are the assumptions that Europe will continue to ease monetary policy and that the US will avert a crushing blow to growth by fending off a so-called "fiscal cliff" that could result from a failure to reach a compromise on its budget law and tax cuts.
Conditions could worsen if the US doesn't deal with its budget crisis soon, the IMF said.
"Downside risks have increased and are considerable," the IMF said. Its forecasts are based "on critical policy action in the euro area and the United States, and it is very difficult to estimate the probability that this action will materialize," it said.
The IMF has urged the US to raise the ceiling on the level of debt the government can issue, which is capped by law.
Advanced economies are risking recession, the IMF said in a quarterly update of its World Economic Outlook, and the malaise is spreading to more dynamic emerging economies such as China.
The IMF forecasts that the world economy will expand 3.3 percent this year, down from the estimate of 3.5 percent growth it issued in July.
Its forecast for growth in 2013 is 3.6 percent, down from 3.9 percent three months ago and 4.1 percent in April.
Underpinning that bleaker scenario are the assumptions that Europe will continue to ease monetary policy and that the US will avert a crushing blow to growth by fending off a so-called "fiscal cliff" that could result from a failure to reach a compromise on its budget law and tax cuts.
Conditions could worsen if the US doesn't deal with its budget crisis soon, the IMF said.
"Downside risks have increased and are considerable," the IMF said. Its forecasts are based "on critical policy action in the euro area and the United States, and it is very difficult to estimate the probability that this action will materialize," it said.
The IMF has urged the US to raise the ceiling on the level of debt the government can issue, which is capped by law.
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