News / USA

IMF Cuts Growth Forecast, Warns US on Borrowing Limit

IMF Cuts Growth Forecast, Warns US on Borrowing Limiti
X
October 09, 2013 3:16 AM
The International Monetary Fund has trimmed its forecast for the global economy, citing slower growth in developing nations. While the estimates are down slightly from earlier projections, the IMF sees the global economy rebounding from 2.9 percent this year to 3.6 percent in 2014. For now, the biggest source of uncertainty may be the United States.
Watch video from VOA's Mil Arcega
VOA News
The International Monetary Fund is cutting its forecast for economic growth throughout the world -- mostly because expansion has slowed in China, India, Brazil and other developing countries.

The IMF said Tuesday it expects the global economy to advance 2.9 percent this year and by 3.6 percent in 2014, both down from previous forecasts. The Washington-based agency said that economic growth had slowed or flattened throughout the world.

At the same time, the IMF's chief economist, Olivier Blanchard, warned there could be major financial disruptions throughout the world if the United States does not increase its borrowing limit in the coming days to avoid a default on its financial obligations. The U.S. government is in the midst of an eight-day partial shutdown and at the same time is running out of money to pay its bills.

U.S. financial officials said Congress needs to increase the country's $16.7 trillion debt ceiling by October 17 so it can continue to borrow money to fund its operations and pay interest on vast government securities held by China, Japan and other overseas investors.

Blanchard said the government shutdown, if it does not last too long, is likely to have a limited effect on the world economy, but that a U.S. debt default could be calamitous.

"Failure to lift the debt ceiling would, however, be a major event. Prolonged failure would lead to an extreme fiscal consolidation and almost surely derail the U.S. recovery. But the effect of any failure to repay the debt would be felt right away, leading to potential major disruptions in financial markets, both in the United States and abroad," Blanchard stated.

The IMF forecast 7.3 percent growth next year in China, the world's second largest economy after the U.S., down from a 7.6 percent advance this year. It sees growth expanding by 5.1 percent in India, an improvement over this year, but still lower than predicted. The IMF said Brazil's growth would be steady at 2.5 percent this year and next.

At the same time, the IMF said that the American economy would grow a meager 1.6 percent this year and advance by 2.6 percent in 2014, with both forecasts down from July forecasts.

The IMF said the economy in the 17-nation Eurozone would fall four-tenths of a percent this year and grow 1 percent in 2014. Collectively, the eurozone has a larger economy than the U.S. and is an important trading partner throughout the world, but debt-ridden economies on its western and southern flanks led to an 18-month recession.

You May Like

Republican Majority in Congress Off to Rough Start

Standoff over Homeland Security funding exposes philosophical, tactical problems within party More

Pakistan Blocks Baloch Activist from US Trip

Human Rights Commission of Pakistan slams Islamabad officials for stopping people from leaving country to attend human rights conference More

Video Muslims Long Thrived in North Carolina Before Students Killed

Idyll shattered February 10, when three Muslim university students living in Chapel Hill were gunned down by a neighbor More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Sierra Leone Ebola Orphans Face Another Crisisi
X
March 06, 2015 12:28 AM
There's growing concern about the future of an orphanage run by a British charity in Sierra Leone, after a staff member and his wife died this week from Ebola. The Saint George Foundation Orphanage in Freetown is now in quarantine, with more than 20 children and seven staff in lock-down. The BBC has agreed to share Ebola-related material with Voice of America because of the difficulties faced by media organizations reporting the crisis. Clive Myrie reports from Sierra Leone.
Video

Video Sierra Leone Ebola Orphans Face Another Crisis

There's growing concern about the future of an orphanage run by a British charity in Sierra Leone, after a staff member and his wife died this week from Ebola. The Saint George Foundation Orphanage in Freetown is now in quarantine, with more than 20 children and seven staff in lock-down. The BBC has agreed to share Ebola-related material with Voice of America because of the difficulties faced by media organizations reporting the crisis. Clive Myrie reports from Sierra Leone.
Video

Video Growing Concerns Over Whether Myanmar’s Next Elections Will Be Fair

Myanmar has scheduled national elections for November that are also expected to include a landmark referendum on the country's constitution. But there are growing concerns over whether the government is taking the necessary steps to prepare for a free and fair vote. VOA Correspondent Steve Herman was recently in Myanmar and files this report from our Southeast Asia bureau in Bangkok.
Video

Video Nigeria’s Ogonis Divided Over Resuming Oil Production

More than two decades ago, Nigeria’s Ogoni people forced Shell oil company to cease drilling on their land, saying it was polluting the environment. Now, some Ogonis say it’s time for the oil to flow once again. Chris Stein reports from Kegbara Dere, Nigeria.
Video

Video Winter Weather Strikes Eastern US...Again!

A new wintry blast has hit more than 20 states in the U.S. Midwest and Mid-Atlantic region, adding more snow to the piles from previous storms. Tired of shoveling snow, breaking the ice and dealing with accidents, flight delays and property damage, most Americans hope this is the last bout of cold for the season. Zlatica Hoke reports.
Video

Video Muslims Long Thrived in N Carolina Before Slaying of 3 Students

The killings of three Muslim students in North Carolina early last month came as Muslims across the United States have felt under siege, partly as a result of terrorist attacks being committed internationally in the name of their faith. But Muslims have long thrived in university cities in this part of the American South. VOA's Jerome Socolovsky reports.
Video

Video Fuel Shortages in Nigeria Threaten Election Campaigns

Nigeria is suffering a gas shortage as the falling oil price has affected the country’s ability to import and distribute refined fuels. Coming just weeks before scheduled March 28 elections, the shortage could have a big impact on the campaign, as Henry Ridgwell reports for VOA.
Video

Video Report: Human Rights in Annexed Crimea Deteriorating

A new report by Freedom House and the Atlantic Council of the United States says the human rights situation in Crimea has deteriorated since the peninsula was annexed by Russia in March of last year. The report says the new authorities in Crimea are discriminating against minorities, suppressing freedom of expression, and forcing residents to assume Russian citizenship or leave. Zlatica Hoke has more.
Video

Video 50 Years Later African-Americans See New Voting Rights Battles Ahead

Thousands of people will gather to mark the 50th anniversary of a historic civil rights march on March 7th in Selma, Alabama. In 1965, dozens of people were seriously injured during the event known as “Bloody Sunday,” after police attacked African-American demonstrators demanding voting rights. VOA’s Chris Simkins introduces us to some civil rights pioneers who are still fighting for voting rights in Alabama more than 50 years later.
Video

Video Craft Brewers Taking Hold in US Beer Market

Since the 1950’s, the U.S. beer industry has been dominated by a handful of huge breweries. But in recent years, the rapid rise of small craft breweries has changed the American market and, arguably, the way people drink beer. VOA’s Jeff Custer reports.
Video

Video Video Claims to Show Shia Forces in Iraq Executing Sunni Boy

A graphic mobile phone video is spreading on the Internet, claiming to show Iraqi forces or Shia militia executing a handcuffed Sunni boy. Experts have yet to verify the video, but already Islamic State followers are publicizing it across social media, playing on deep-rooted sectarian fears. VOA’s Jeff Seldin reports.
Video

Video Ukrainian Authorities Struggle to Secure a Divided Mariupol

Since last month's cease-fire went into effect, shelling around the port city of Mariupol has decreased, but it is thought pro-Russian separatists remain poised to attack. For the city’s authorities, a major challenge is gaining the trust of residents, while at the same time rooting out informants who are passing sensitive information to the rebels. Patrick Wells reports for VOA.
Video

Video Myanmar's Traditional Fashion Choices Endure

The sartorial choices of Myanmar’s men and women quickly catch the eye of any visitor to the tropical Southeast Asian country. But at a time when Myanmar’s political and economic opening is bringing affordable western fashions to the masses, will the country’s unique fashion trends endure? VOA Correspondent Steve Herman in Yangon explores that question.

All About America

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More