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IMF sees 'even worse' outlook
Source: Agencies |
January 22, 2009, Thursday
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THE International Monetary Fund will sharply cut growth forecasts this month and the world will not return to strong growth for two or three years, IMF Managing-Director Dominique Strauss-Kahn said yesterday.
"Things are not improving," Strauss-Kahn said in an interview with the BBC.
The IMF's last forecast was "not that good" and a new forecast, to be released in a few days, will be "even worse," he said.
Asked about the fund's forecasts for the world, United States and European economies, Strauss-Kahn said that he did not know exactly how much these would be cut, but added: "I'm afraid that at least half a point or one percentage point down."
In its November forecast, the IMF said that world output would grow by 2.2 percent in 2009 while the US would shrink by 0.7 percent and the euro area would lose 0.5 percent but the credit crunch has worsened since then.
Asked if the downwards revision meant that the IMF expected a contraction in US and Europe of between 1 percent and 2 percent this year, Strauss-Kahn said: "There is going to be this kind of contraction in the US, in Europe, including the UK."
Emerging countries would also do worse than expected, he said. "China, India, Brazil, other emerging countries" will see "very slow growth."
He said that the first half of 2009 will be bad, the second half may show some improvement, but recovery can begin only at the beginning of 2010. "We are not going to go back to a high rate of growth before two or three years."
"Things are not improving," Strauss-Kahn said in an interview with the BBC.
The IMF's last forecast was "not that good" and a new forecast, to be released in a few days, will be "even worse," he said.
Asked about the fund's forecasts for the world, United States and European economies, Strauss-Kahn said that he did not know exactly how much these would be cut, but added: "I'm afraid that at least half a point or one percentage point down."
In its November forecast, the IMF said that world output would grow by 2.2 percent in 2009 while the US would shrink by 0.7 percent and the euro area would lose 0.5 percent but the credit crunch has worsened since then.
Asked if the downwards revision meant that the IMF expected a contraction in US and Europe of between 1 percent and 2 percent this year, Strauss-Kahn said: "There is going to be this kind of contraction in the US, in Europe, including the UK."
Emerging countries would also do worse than expected, he said. "China, India, Brazil, other emerging countries" will see "very slow growth."
He said that the first half of 2009 will be bad, the second half may show some improvement, but recovery can begin only at the beginning of 2010. "We are not going to go back to a high rate of growth before two or three years."
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