IMF to cut global GDP forecast as outlook worsens - Lagarde

06 July 2012 15:55  [Source: ICIS news]

LONDON (ICIS)--The International Monetary Fund (IMF) expects to lower its growth forecast for the global economy as the outlook has worsened in past months, its managing director said on Friday.

“Over the past few months, the outlook has, regrettably, become more worrisome,” Christine Lagarde said in a speech at a policy forum in Tokyo.

“Many indicators of economic activity—investment, employment, manufacturing—have deteriorated. And not just in Europe or the US, [but] also in key emerging markets: Brazil, China, India,” Lagarde said.

Lagarde said that the IMF would therefore lower its projection for the global economy in its next update, due to be issued on 16 July. It its April assessment, the IMF raised its forecast for global economic growth to 3.5%, from 3.3% it had projected in January.

“The global growth outlook will be somewhat less than we anticipated just three months ago,” Lagarde said.

“And even that lower projection will depend on the right policy actions being taken,” she added.

In her speech, Lagarde stressed that the crisis is not just a European concern.

“This is a global crisis. In today’s interconnected world, we can no longer afford to look only at what goes on within our national borders. This crisis does not recognise borders,” she said.

As for Europe, Lagarde said that at their summit last month, European leaders had agreed “significant steps in the right direction to address the immediate crisis.”

At the same time, “further progress will continue to be needed to overcome the crisis decisively and avoid the damaging effects on stability and growth,” she said.

Paul Hodges studies key influences shaping the chemical industry in his Chemicals and the Economy Blog

By: Stefan Baumgarten
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