Downgrading growth forecasts

IMF's Christine Lagarde warns of more global growth cuts

The International Monetary Fund looks likely to cut its forecast for global growth next month when it updates its projections for the world economy

BBC,

24 September, 2012

IMF head Christine Lagarde said in a speech that global growth would "likely be a bit weaker" than anticipated.

Problems in the eurozone and worries about the US economy continued to weigh on investors' confidence, she said.

She also warned of a slowdown in some of the emerging nations that previously bolstered global economic growth.

In July, the IMF cut its global growth projection for 2013 to 3.9%, but left its 2012 forecast unchanged at 3.5%.

Mrs Lagarde, speaking in Washington, said on Monday: "We continue to project a gradual recovery, but global growth will likely be a bit weaker than we had anticipated even in July, and our forecast has trended downward over the last 12 months."

She welcomed recent measures by eurozone governments and the European Central Bank to get a grip on the bloc's problems.

Earlier this month, the ECB said it would buy an unlimited number of bonds from distressed eurozone countries. "It was clearly a turning point," Mrs Lagarde said.

But she added that region was still "the epicentre" of the crisis.

Mrs Lagarde also said the US must avoid plunging off a fiscal cliff of deep government spending cuts and tax increases that could cause another recession and harm the global economy.