Yes, I did not like the general economic news today either.
ST
PARIS (Reuters) - The International Monetary Fund (news - web sites) is to cut its 2003 global economic growth forecast to 3.2 percent and sees serious risks to growth if the Iraq (news - web sites) war is prolonged, an IMF source told Reuters on Wednesday.
The source said the relatively robust growth forecast, due to be published in the IMF's semi-annual World Economic Outlook at 1500 GMT, was based on the assumption of oil prices averaging $31 per barrel and dynamic growth in Asia and transition countries.
In the IMF last outlook published last September, it had predicted global growth of 3.7 percent.
"The IMF warns about the serious economic consequences if the war in Iraq lasts much longer," the source said.
The source said the IMF would also shave its U.S. growth outlook for this year to 2.2 percent from 2.6 percent.
It said risks to growth were posed by the country's budget deficit, which could exceed five percent of GDP (news - web sites) if the war continues for longer, as well as a slump in stock markets and the high current account deficit.
The IMF would cut its euro zone growth forecast to 1.1 percent from 2.3 percent, as economic conditions in the single currency area sink to a six-year low, the source said, with German GDP growth seen at 0.5 percent, down from last September's forecast of 2.0 percent.
The IMF also cuts its forecast for France to 1.2 percent from 2.3 percent, and for Italy to 1.1 percent from 2.3 percent.
The growth forecast for Japan was lowered to 0.8 percent from 1.1 percent. The United Kingdom forecast was lowered to 2.0 percent from 2.4 percent.
The IMF cut its prediction for Canada's 2003 GDP growth to 2.8 percent from 3.4 percent. The forecast for Russia fell to 4.0 percent from 4.9 percent.
The head of the International Monetary Fund had on Tuesday forecast global economic growth of a little more than three percent this year and urged Europe and Japan to do more to reinvigorate prospects.
IMF Managing Director Horst Koehler told Reuters the global economy in 2003 would expand by, "A bit more than last year (when growth came in at three percent) but not a lot more."
"There is a risk of a worse outcome. Nobody can rule it out," he said, noting it was "realistic that a moderate recovery is the most likely development."
Koehler said the global economic recovery, assuming a short war in Iraq, would pick up in the second half of this year but that lingering uncertainty about terrorism means that the world's major economies need, "really to accelerate reforms."
He also blamed Europe and Japan for not doing more to quicken (news - web sites) needed reforms over the past year.
For a table on forecasts please click on |
