Sat, Jul 07, 2012 - Page 15 News List

IMF chief warns of slowdown in world economy

BEARER OF BAD NEWS:Despite the fund’s gloomy outlook, its director praised the moves made by the EU to stem the crisis, but said more needed to be done


IMF Managing Director Christine Lagarde yesterday warned that the global economy was slowing, with a soon-to-be published growth outlook lower than earlier forecasts.

“What I can tell you is that it will be tilted to the downside and certainly lower than the forecast that was published three months ago,” she told an economic forum in Tokyo.

In April, the IMF hiked its global growth forecasts to an annual rate of 3.5 percent this year, accelerating to 4.1 percent next year, up from its January forecast of 3.3 percent and 4 percent respectively.

Lagarde declined to elaborate on the upgraded assessment due later this month, but said that the outlook since the last IMF forecast had “regrettably” become “more worrisome.”

The IMF had said its improved global forecast in April was due in part to better global financial conditions and easing fears about the eurozone debt crisis.

“The outlook for the global economy is slowly improving again, but is still very fragile,” it said at the time.

Lagarde yesterday also hailed recent “significant steps” to contain the eurozone crisis, but warned that “more needs to be done.”

She cited measures adopted after a European leaders’ meeting in Brussels last week and the European Central Bank’s move on Thursday to cut interest rates to historic lows as proof of progress.

However, “from the IMF perspective, we believe that more needs to be done in order to complete [the reform],” she added.

“It’s also a question of implementation — diligent, rigorous, steady implementation,” she aid at the economic symposium in Tokyo during a week-long Asian tour.

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