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

    Russian-Backed Offensive in Syria Pushes War to Tipping Point

    As threat to Aleppo and rebel forces grows, US plan to negotiate becomes less and less appealing for Syrian government, says one military analyst

    IS Runs Timber Smuggling Business in Afghanistan, Officials Say

    Government turning blind eye to smuggling, according to tribal leaders; Afghanistan's forest cover dropped by 50 percent in three decades, experts say

    Video White House Seeks $1.8 Billion to Combat Zika

    Obama administration says funding would 'support essential strategies to combat the virus' such as rapidly expanding mosquito control programs, accelerating vaccine research

    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.
    'No Means No' Program Targets Sexual Violence in Kenyai
    X
    February 08, 2016 4:30 PM
    The organizers of an initiative to reduce and stop rape in the informal settlements around Kenya's capital say their program is having marked success. Girls are taking self-defense classes while the boys are learning how to protect the girls and respect them. Lenny Ruvaga reports from Nairobi.
    Video

    Video 'No Means No' Program Targets Sexual Violence in Kenya

    The organizers of an initiative to reduce and stop rape in the informal settlements around Kenya's capital say their program is having marked success. Girls are taking self-defense classes while the boys are learning how to protect the girls and respect them. Lenny Ruvaga reports from Nairobi.
    Video

    Video New Hampshire Voters Are Independent, Mindful of History

    Once every four years, the northeastern state of New Hampshire becomes the center of the U.S. political universe with its first-in-the-nation presidential primary. What's unusual about New Hampshire is how seriously the voters take their role and the responsibility of being among the first to weigh in on the candidates.
    Video

    Video Chocolate Lovers Get a Sweet History Lesson

    Observed in many countries around the world, Valentine’s Day is sometimes celebrated with chocolate festivals. But at a festival near Washington, the visitors experience a bit more than a sugar rush. They go on a sweet journey through history. VOA’s June Soh takes us to the festival.
    Video

    Video 'Smart' Bandages Could Heal Wounds More Quickly

    Simple bandages are usually seen as the first line of attack in healing small to moderate wounds and burns. But scientists say new synthetic materials with embedded microsensors could turn bandages into a much more valuable tool for emergency physicians. VOA’s George Putic reports.
    Video

    Video Bhutanese Refugees in New Hampshire Closely Watching Primary Election

    They fled their country and lived in refugee camps in neighboring Nepal for decades before being resettled in the northeastern U.S. state of New Hampshire -- now the focus of the U.S. presidential contest. VOA correspondent Aru Pande spoke with members of the Bhutanese community, including new American citizens, about the campaign and the strong anti-immigrant rhetoric of some of the candidates.
    Video

    Video Researchers Use 3-D Printer to Produce Transplantable Body Parts

    Human organ transplants have become fairly common around the world in the past few decades. Researchers at various universities are coordinating their efforts to find solutions -- including teams at the University of Pennsylvania and Rice University in Houston that are experimenting with a 3-D printer -- to make blood vessels and other structures for implant. As VOA’s Greg Flakus reports from Houston, they are also using these artificial body parts to seek ways of defeating cancerous tumors.
    Video

    Video Helping the Blind 'See' Great Art

    There are 285 million blind and visually impaired people in the world who are unable to enjoy visual art at a museum. One New York photographer is trying to fix this situation by making tangible copies of the world’s masterpieces. VOA correspondent Victoria Kupchinetsky was there as visually impaired people got a feel for great art. Joy Wagner narrates her report.
    Video

    Video Sanders, Clinton Battle for Young Democratic Vote

    Despite a narrow loss to former Secretary of State Hillary Clinton in last week's Iowa Democratic caucuses, Vermont Senator Bernie Sanders secured more than 80 percent of the vote among those between the ages of 18 and 29. VOA correspondent Aru Pande talks to Democrats in New Hampshire about who they are leaning towards and why in this week's primary.
    Video

    Video German Artists to Memorialize Refugees With Life Jacket Exhibit

    Sold in every kind of shop in some Turkish port towns, life jackets have become a symbol of the refugee crisis that brought a million people to Europe in 2015.  On the shores of Lesbos, Greece, German artists collect discarded life jackets as they prepare an art installation they plan to display in Germany.  For VOA, Hamada Elrasam has this report from Lesbos, Greece.
    Video

    Video E-readers Help Ease Africa's Book Shortage

    Millions of people in Africa can't read, and there's a chronic shortage of books. A non-profit organization called Worldreader is trying to help change all that one e-reader at a time. VOA’s Deborah Block tells us about a girls' school in Nairobi, Kenya where Worldreader is making a difference.
    Video

    Video Genius Lets World Share Its Knowledge

    Inspired by crowdsourcing companies like Wikipedia, Genius allows anyone to edit anything on the web, using its web annotation tool
    Video

    Video In Philippines, Mixed Feelings About Greater US Military Presence

    In the Philippines, some who will be directly affected by a recent Supreme Court decision clearing the way for more United States troop visits are having mixed reactions.  The increased rotations come at a time when the Philippines is trying to build up its military in the face of growing maritime assertiveness from China.  From Bahile, Palawan on the coast of the South China Sea, Simone Orendain has this story.
    Video

    Video Microcephaly's Connection to Zika: Guilty Until Proven Innocent

    The Zika virus rarely causes problems for the people who get it, but it seems to be having a devastating impact on babies whose mothers are infected with Zika. VOA's Carol Pearson has more.
    Video

    Video Stunning Artworks Attract Record Crowds, Thanks to Social Media

    A new exhibit at the oldest art museum in America is shattering attendance records. Thousands of visitors are lining up to see nine giant works of art that have gotten a much-deserved shot of viral marketing. The 150-year-old Smithsonian American Art Museum has never had a response quite like this. VOA's Julie Taboh reports.

    World Currencies

    EUR
    USD
    0.9008
    JPY
    USD
    116.30
    GBP
    USD
    0.6957
    CAD
    USD
    1.3951
    INR
    USD
    68.033

    Rates may not be current.