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IMF update underlines speed of slide into global recession
The International Monetary Fund (IMF) sharply revised its estimates for global growth downwards last Thursday, predicting a simultaneous recession in the US, Japan and major European economies for the first time since the institution was established in 1945. The IMF cut its previous projection of 3 percent for the world growth rate in 2009 to 2.2 percent, with an overall contraction in the advanced economies of 0.3 percent.
The new assessment is an update to the IMF's World Economic Outlook (WEO) issued just last month—a sign both of the speed with which the world economic crisis is unfolding and the inability of governments and global institutions to comprehend, let alone stop, the rapid slowdown. The IMF summed up the bleak outlook, stating: "Prospects for global growth have deteriorated over the past month, as financial sector deleveraging has continued and producer and consumer confidence have fallen."
The IMF stated in April that global growth of less than 3 percent was "equivalent to a global recession". Last week, however, IMF chief economist Olivier Blanchard played down the latest figures, saying that he did not view the 3 percent level as a "useful" definition. He urged coordinated international action, saying that if that happened, "the forecast we have may be on the pessimistic side."
There is no doubt that the rapidity of the economic slowdown and the intractability of the financial crisis have caught the IMF by surprise. Warnings that the global economy is either in recession, or is rapidly sliding into one, are now commonplace. Talks of a full-blown economic depression is also being quietly discussed. At a meeting of the World Economic Forum in Dubai, one senior monetary official told Reuters: "There is a real possibility of a real, deep, international depression." He described the crisis as "the worst in 100 years."
More
http://wsws.org/articles/2008/nov2008/imfu-n10.shtml
The IMF stated in April that global growth of less than 3 percent was "equivalent to a global recession". Last week, however, IMF chief economist Olivier Blanchard played down the latest figures, saying that he did not view the 3 percent level as a "useful" definition. He urged coordinated international action, saying that if that happened, "the forecast we have may be on the pessimistic side."
There is no doubt that the rapidity of the economic slowdown and the intractability of the financial crisis have caught the IMF by surprise. Warnings that the global economy is either in recession, or is rapidly sliding into one, are now commonplace. Talks of a full-blown economic depression is also being quietly discussed. At a meeting of the World Economic Forum in Dubai, one senior monetary official told Reuters: "There is a real possibility of a real, deep, international depression." He described the crisis as "the worst in 100 years."
More
http://wsws.org/articles/2008/nov2008/imfu-n10.shtml
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