News / Economy

    IMF Downgrades Outlook For US, European Economies

    International Monetary Fund Managing Director Christine Lagarde discusses "Global Economic Challenges and Solutions" in a speech in Washington, D.C., September 15, 2011.
    International Monetary Fund Managing Director Christine Lagarde discusses "Global Economic Challenges and Solutions" in a speech in Washington, D.C., September 15, 2011.

    The International Monetary Fund is sharply downgrading its outlook for the global economy, saying it is entering a "dangerous new phase."

    The IMF said Tuesday that the recovery from the world recession has "weakened considerably," and cut its growth forecasts for almost every geographic region. It said that the overall global economy will grow by 4 percent this year and next, fueled by rapid expansion in China, India and Brazil.

    The agency painted a much gloomier picture for the world's largest economy in the United States and the 17 European nations that use the common euro currency. It warned that Western nations could retreat into a recession if they are unable to reduce governmental spending and restore consumer confidence to promote economic growth.

    The IMF's chief economist, Olivier Blanchard, said that "fear of the unknown is high."

    The international funding agency, in its twice yearly outlook, predicted that the American economy would expand by just 1.5 percent this year, and only slightly improve to 1.8 percent next year. By contrast, as recently as June, the IMF said the U.S. economic fortunes would advance by 2.5 percent this year and a bit more in 2012.

    The IMF also downgraded its prediction for the eurozone nations, based on worries that Greece will default on its international bailout loans and destabilize the region. Greece is engaged this week in negotiations with its international creditors to avoid a default, but some financial analysts say Athens could still falter in the months ahead even if it resolves its immediate funding crisis.

    The agency said the eurozone economy will grow by 1.6 percent this year and just 1.1 percent in 2012, with both projections down from the IMF's June forecasts.

    Blanchard said "strong policies are urgently needed" by U.S. and European leaders to reduce the risk of a sharp financial downturn. IMF officials say both U.S. and European lawmakers need to move decisively to cut governmental budget deficits. That task has proved difficult on both continents and led to European street protests against austerity budget measures and contentious, often stalemated deficit negotiations in the U.S.

    The IMF economist said a proposal by U.S. President Barack Obama to cut some taxes for American workers and boost infrastructure spending could provide a short-term stimulus for the American economy. But he added that the plan must be paired with a longer-range focus on trimming the government's debt.

    The IMF said that China, with a 9 percent advance in 2012, would continue to lead world economic growth. It said India would advance at a 7.5 percent pace. But the agency downgraded its predictions for Russia, Latin America, sub-Saharan Africa, the Middle East and North Africa.

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

    You May Like

    Vietnam Mulls Tough Measures for ‘Misbehaving’ Chinese Tourists

    Move comes after footage surfaced online of Chinese travelers harassing a banana hawker in Da Nang

    The Complicated Math of AIDS

    Billions are spent on AIDS prevention, research, treatment — and major events like the International AIDS Conference. Activists say victims of the disease are paying for these costs.

    Pakistan Social Media Star's Honor Killing Fuels Debate

    Qandeel Baloch's murder puts spotlight on deadly tradition and other mistreatment of women

    This forum has been closed.
    Comments
         
    There are no comments in this forum. Be first and add one

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Wall Already Runs Along Parts of US-Mexico Borderi
    X
    July 22, 2016 12:30 AM
    The Republican Party’s presidential nominee, Donald Trump, gained the support of many voters by saying he would build a wall to keep undocumented immigrants and drugs from coming across the border from Mexico. Critics have called his idea impractical and offensive to Mexico, while supporters say such a bold approach is needed to control the border. VOA’s Greg Flakus has more from the border town of Nogales, Arizona.
    Video

    Video Wall Already Runs Along Parts of US-Mexico Border

    The Republican Party’s presidential nominee, Donald Trump, gained the support of many voters by saying he would build a wall to keep undocumented immigrants and drugs from coming across the border from Mexico. Critics have called his idea impractical and offensive to Mexico, while supporters say such a bold approach is needed to control the border. VOA’s Greg Flakus has more from the border town of Nogales, Arizona.
    Video

    Video New HIV Tests Emphasize Rapid Results

    As the global fight against AIDS intensifies, activists have placed increasing importance on getting people to know their HIV status. Some companies are developing new HIV testing methods designed to be quick, easy and accurate. Thuso Khumalo looks at the latest methods, presented at the International AIDS conference in Durban, South Africa.
    Video

    Video African Youth with HIV Urge More Support

    HIV, the virus that causes AIDS, is the top killer of teens in sub-Saharan Africa. But many youths say their experience with the virus is unique and needs to be addressed differently than the adult epidemic. VOA South African Correspondent Anita Powell reports.
    Video

    Video Poor Residents in Cleveland Not Feeling High Hopes of Republican Convention

    With the Republican Party's National Convention underway in Cleveland, Ohio, delegates and visitors are gathered in the host city's downtown - waiting to hear from the party's presidential candidate, Donald Trump. But a few kilometers from the convention's venue, Cleveland's poorest residents are not convinced Trump or his policies will make a difference in their lives. VOA's Ramon Taylor spoke with some of these residents as well as some of the Republican delegates and filed this report.
    Video

    Video Pop-Up Art Comes to Your Living Room, Backyard and Elsewhere

    Around the world, independent artists and musicians wrestle with a common problem: where to exhibit or perform? Traditional spaces such as museums and galleries are reserved for bigger names, and renting a space is not feasible for many. Enter ArtsUp, which connects artists with venue owners. Whether it’s a living room, restaurant, office or even a boat, pop-up events are bringing music and art to unexpected places. Tina Trinh has more.
    Video

    Video With Yosemite as Backdrop, Obama Praises National Parks

    Last month, President Barack Obama and his family visited some of the most beautiful national parks in the U.S. Using the majestic backdrop of a towering waterfall in California's Yosemite National Park, Obama praised the national park system which celebrates its 100th anniversary this year. He talked about the importance of America’s “national treasures” and the need to protect them from climate change and other threats. VOA’s Julie Taboh reports.
    Video

    Video Counter-Islamic State Coalition Plots Next Steps

    As momentum shifts against Islamic State in Iraq, discussions are taking place about the next steps for driving the terrorist group from its final strongholds. Secretary of State John Kerry is hosting a counter-IS meeting at the State Department, a day after defense ministers from more than 30 countries reviewed and agreed upon a course of action. VOA Pentagon correspondent Carla Babb reports.
    Video

    Video Russia's Participation at Brazil Olympic Games Still In Question

    The International Olympic Committee has delayed a decision on whether to ban all Russian teams from competing in next month's Olympic Games in Brazil over allegations of an elaborate doping scheme. The World Anti-Doping Agency recently released an independent report alleging widespread doping by Russian athletes at the 2014 Winter Olympics in Sochi. So far, only Russian track and field athletes have been barred from the Summer Games in Brazil. VOA's Zlatica Hoke has more.
    Video

    Video Scotland’s Booming Whisky Industry Fears Brexit Hangover

    After Britain’s vote to leave the European Union, Scotland’s government wants to break away from the United Kingdom – fearing the nation’s exports are at risk. Among the biggest of these is whisky. Henry Ridgwell reports on a time of turmoil for those involved in the ancient art of distilling Scotland’s most famous product.
    Video

    Video Millennials Could Determine Who Wins Race to White House

    With only four months to go until Americans elect a new president, one group of voters is getting a lot more attention these days: those ages 18 to 35, a generation known as millennials. It’s a demographic that some analysts say could have the power to decide the 2016 election. But a lot depends on whether they actually turn out to vote. VOA’s Alexa Lamanna reports.
    Video

    Video Number of Syrian Refugees Arriving in US Jumps

    The United States is committed to resettling 85,000 refugees from around the world by October. Of that number, 10,000 will come from Syria and already some 4,000 Syrian refugees have arrived in the United States, many of them settling in the state of Illinois. As VOA’s Kane Farabaugh reports from Chicago, their arrival is not the end of a difficult journey to find peace and stability.
    Video

    Video Rio’s Trams Await Olympic Tourists

    Over the past century, many cities around the world replaced electric trams, prone to breakdowns and backups, with faster and more spacious buses. But for some reason restored antique trams are a huge tourist attraction. So it’s no wonder the authorities in Rio de Janeiro are busy restoring their city’s old tram line ahead of the Summer Olympic Games. VOA’ George Putic reports.

    Special Report

    Adrift The Invisible African Diaspora

    World Currencies

    EUR
    USD
    0.9079
    JPY
    USD
    106.10
    GBP
    USD
    0.7636
    CAD
    USD
    1.3106
    INR
    USD
    67.076

    Rates may not be current.