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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (70026)	10/9/2007 2:26:07 PM
From: RealMuLan	Read Replies (1) \| Respond to of 116555

IMF Said to Cut 2008 Growth Outlook By DAVID RISING – 2 hours ago ap.google.com BERLIN (AP) — The International Monetary Fund will cut its 2008 growth forecast for all major economies in its World Economic Outlook after the U.S. subprime mortgage lending crisis, a person with access to the report said Tuesday. The Washington-based group now expects global economic growth of 4.8 percent for next year, according to the person, who spoke on condition of anonymity because he was not authorized to discuss the report, set to be released next week. The new global forecast was down by 0.4 percentage point from the 5.2 percent predicted in July, before global financial markets were shaken by the fallout from the subprime mortgage lending crisis in the United States. The crisis has sparked a credit squeeze, raising the cost of borrowing. The IMF will also cut its growth forecast for the U.S. to 1.9 percent from 2.8 percent previously, and for Canada to 2.3 percent from the earlier 2.8 percent, the person said. The euro zone — the 13 nations that use the euro currency, including Germany and France — is now expected to post growth of 2.1 percent in 2008, down from the 2.5 percent forecast earlier. Europe's largest economy Germany should see 2 percent growth next year, down from the previous 2.4 percent forecast. France should also see 2 percent growth, compared with the 2.3 percent predicted previously, the person said. The IMF also forecasts that China's surging economy will grow by 10 percent in 2008, down from the previous 10.5 percent forecast, the person said. IMF Managing Director Rodrigo Rato had said last month that the fund would likely lower some of its 2008 economic growth forecasts to reflect the impact of financial market turbulence. He said then that its 2007 forecasts could also be revised downward. The person with access to the report, however, gave no details of 2007 forecast changes. The consequences of the meltdown in the U.S. subprime lending market and the ensuing credit liquidity crisis would be "more clear in 2008," Rato said at the time.