My comment: IMO its prediction for 2009 is too optimistic in some cases. http://www.bloomberg.com/apps/news?pid=20601087&sid=az0Qc87VU3bM&refer=home
Oct. 7 (Bloomberg) -- Global growth is headed for a ``major downturn'' next year, as U.S. gross domestic product grinds close to a halt, the International Monetary Fund said in a staff report prepared for a Group of Seven meeting this week. The U.S. will expand 0.1 percent next year, after growth of 1.6 percent this year, the IMF said in the report prepared for the Oct. 10 meeting of finance ministers and central bankers from the G-7 industrial nations. In its World Economic Outlook in April, the IMF said the U.S. would grow 0.5 percent this year and 0.6 percent next. A revised WEO will be released tomorrow. ``The global economy is entering a major downturn,'' the fund said in the report, dated Oct. 4. ``Many advanced economies are now close to recession, while emerging economies are also slowing rapidly.'' The IMF report suggested that the European Central Bank has scope to lower interest rates to help limit economic damage from the financial market crisis. The Washington-based lender said in the note that the dollar is ``in line'' with economic fundamentals, the euro is ``on the strong side'' and the yen is ``undervalued'' in the medium term. The draft obtained by Bloomberg News indicates changes from the April forecasts. IMF spokeswoman Conny Lotze declined to comment on the figures. Growth will be ``particularly weak'' in the G-7 countries -- the U.S., Japan, Germany, France, the U.K., Canada and Italy, the IMF report said. U.S. Recession Global growth will slow to 3 percent in 2009, compared with a forecast in April of 3.7 percent. This year the global economy is expected to grow by 3.9 percent. A recession in the U.S. is ``looming,'' growth in western Europe is ``weakening markedly,'' activity in Japan is ``cooling rapidly'' and emerging countries ``have not decoupled from this downturn'' the report said. Of advanced economies, the IMF made its steepest reduction in the growth prediction for U.K., which the fund predicted will contract by 0.1 percent next year, the report said. Six months ago, the IMF forecast U.K. growth 1.6 percent in 2009. Italy's economy will contract 0.2 percent, the IMF predicted, a reduction from its April forecast for 0.3 percent, the report said. The fastest-growing G-7 country will be Canada, where GDP is forecast to increase 1.2 percent, the IMF report said, after a 2 percent outlook in April. Central Bank Policy The IMF report showed Germany's is expected to post zero growth next year, compared with a prediction in April of a 1 percent expansion. France's economy will register 0.2 percent growth, down from a 1.3 percent forecast six months ago, the report said. In the U.S., the Federal Reserve's ``monetary policy is already highly accommodative,'' the IMF draft report said. The Bank of Japan's interest-rate policy stance ``remains accommodative and should remain so given that the economy has weakened and that underlying price pressures are well contained,'' it said. For the ECB, ``monetary conditions are now quite tight,'' the report said. ``In light of this, there is now scope to ease monetary policy.'' --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "World-thread" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [EMAIL PROTECTED] For more options, visit this group at http://groups.google.com/group/world-thread?hl=en -~----------~----~----~----~------~----~------~--~---
