News / Economy

IMF Slashes Global Growth Forecast

IMF Slashes Global Growth Forecast
IMF Slashes Global Growth Forecast
Peter Cobus

The International Monetary Fund has slashed its 2012 global economic forecast, saying Europe's debt crisis threatens to plunge the world economy into a recession.

Just three months ago, the IMF projected a 4-percent advance in global growth for the year, but on Tuesday cut that to 3.3 percent. It forecast growth strengthening to 3.9 percent in 2013.

The Washington-based agency said that the "near-term outlook has noticeably deteriorated."

It said the main threat to world economic fortunes is Europe's unresolved two-year governmental debt crisis. The IMF predicted the eurozone economy would shrink one-half of a percentage point this year, down from a September projection of 1.1 percent expansion.

But the IMF's chief economist, Olivier Blanchard, said that if Europe's financial woes worsen, "the world could be plunged into another recession."

The IMF estimated China's growth at 8.2 percent this year, down from an earlier 9 percent prediction. The agency cut its estimate for India by half a percentage point to 7 percent, and dropped Japan from 2.3 to 1.7 percent. It said growth in the Middle East and North Africa would advance, especially since Libya's nine-month civil war has ended.

The IMF maintained its 1.8 percent growth forecast for the United States, the world's largest economy. But the IMF said that the U.S. and other advanced economies would likely not escape damage if the European crisis intensifies, such as if Greece were to default on its international financial obligations.

Europeans leaders have made a variety of attempts to contain the deficit spending of individual governments throughout the 17-nation bloc that uses the common euro currency. But Greece, Ireland and Portugal have already been forced to secure international bailouts, and now Greece is trying to negotiate terms of another aid package, its second in two years.

The European Union is drafting new rules to tighten controls over spending throughout the continent. But financial analysts are worried that Italy and Spain, with the eurozone's third and fourth largest economies, could also need outside aid that could prove to be big for the continent to handle.

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

You May Like

China Investigates Former Powerful Security Chief

Former security chief and member of Politburo Standing Committee, Zhou Yongkang, under investigation for suspected 'serious disciplinary violation' More

India, US Look to Reset Ties During Kerry Visit

This week's talks will be first high level interaction between two countries since Prime Minister Narendra Modi took charge More

Video Young African Leadership Program Renamed to Honor Mandela

YALI program, launched by President Obama in 2010, aims to build skills in business, entrepreneurship, public management and civic leadership More

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.
Vietnamese Staging Chinese Product Boycott After Oil Rig Spati
X
Reasey Poch
July 28, 2014 7:18 PM
China recently pulled an oil rig from an area of the disputed South China Sea that Vietnam also claims. Despite the action, the incident has had a lingering effect on consumers in Vietnam. VOA's Reasey Poch reports from Hanoi on an effort to boycott Chinese products.
Video

Video Vietnamese Staging Chinese Product Boycott After Oil Rig Spat

China recently pulled an oil rig from an area of the disputed South China Sea that Vietnam also claims. Despite the action, the incident has had a lingering effect on consumers in Vietnam. VOA's Reasey Poch reports from Hanoi on an effort to boycott Chinese products.
Video

Video ESA Spacecraft to Land on a Comet

After a long flight through deep space, a European Space Agency probe is finally approaching its target -- a comet millions of kilometers away from earth. Scientists say the mission may lead to some startling discoveries about the origins of the water on earth. VOA’s George Putic has more.
Video

Video Young Africans Arrive in US for Leadership Program

President Barack Obama's Young African Leadership Initiative has brought hundreds of young Africans to the United States for a six-week program aimed at building their knowledge and skills in fields such as public administration and business. Out of the 50,000 young Africans who applied for the program, just one percent was accepted. VOA's Laurel Bowman caught up with some of those who made the cut and has this report.
Video

Video In Honduras, Amnesty Rumors Fuel US Migration Surges

False rumors in Central America are fueling the current surge of undocumented young people being apprehended at the U.S. border. The inaccurate claims suggest the U.S. will give amnesty to young migrants from the region. As VOA's Brian Padden reports from Honduras, these rumors trace back to President Obama's 2012 executive order to halt deportations for some young undocumented immigrants already living in the United States.
Video

Video Students in Business for Themselves

They're only high school students, but they are making accessories for shoes, fabricating backpacks and doing product photography - all through their own businesses. It's the result of a partnership between a non-profit organization that teaches entrepreneurship and their schools. VOA's Mike O'Sullivan and Deyane Moses met the budding entrepreneurs near Los Angeles.
Video

Video Astronauts Train in Underwater Lab

In the world’s only underwater laboratory, four U.S. astronauts train for a planned visit to an asteroid. The lab - called Aquarius- is located five kilometers off Key Largo, in southern Florida. Living in close quarters and making excursions only into the surrounding ocean, they try to simulate the daily routine of a crew that will someday travel to collect samples of a rock orbiting far away from earth. VOA’s George Putic has more.

AppleAndroid

World Currencies

EUR
USD
0.7305
JPY
USD
101.53
GBP
USD
0.5830
CAD
USD
1.0656
INR
USD
60.075

Rates may not be current.