IMF to lower global economic growth forecast
Business Day - Jul 9th 2012, 09:33
The International Monetary Fund (IMF) on Friday said it plans to lower its global growth outlook, with the new estimates being released later this month.
IMF chief Christine Lagarde told a seminar in Tokyo that even the lower projection would depend on the right policy action being taken.
In April, the IMF said it expects global growth to drop to 3,5% in 2012 from about 4% last year.
A downward revision of global growth could place the growth prospects of other economies, including South Africa, under pressure.
Ms Lagarde said the outlook for the global economy had over the past few months become more worrisome, with many indicators of economic activity — such as investment, employment, and manufacturing — all deteriorating.
She commended action taken by European leaders in trying to address the recession in some countries in the region.
The latest in efforts to boost economic activity in the eurozone included the decision by the European Central Bank (ECB) to cut interest rates on Thursday.
"Further progress will continue to be needed to overcome the crisis decisively and avoid the damaging effects on stability and growth. Not just in Europe, but across the globe," she noted.
Co-ordination and partnership could help countries better manage the global economic slowdown, Ms Lagarde said.
IMF research showed that a co-ordinated strengthening of policies across the Group of 20 countries could raise global growth by 7%, and boost jobs by 36-million over the medium term.
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