The IMF has slashed its forecasts for global growth, it emerged Thursday, as finance ministers gathered in Ottawa, Canada to talk about the prospects for the world's faltering economy.
IMF managing director Horst Kohler, speaking ahead of the postponed World Bank-IMF meeting in the Canadian capital this weekend, said he now expects the world economy to grow at just 2.4 percent this year and next. This would be below the 2.5 percent level generally acknowledged to signal global recession and represents a sharp downward revision from the 2.6 percent for this year and 3.5 percent for next year the IMF was predicting only last month.
"We have to recognize that we face an extraordinary degree of uncertainty in the aftermath of the Sept. 11 attacks," Kohler said, warning that economic forecasting in the wake of the attacks was "something like trying to read the tea leaves."
Predictions for US growth have been reduced particularly sharply, with the IMF now expecting it to expand by 1.1 percent this year and 0.7 percent next year -- less than a third of the 2.2 percent growth expected a month ago.
Official figures showing the US economy contracted at an annual rate of 0.4 percent in the third quarter of this year had already raised concerns that a sharp downturn was under way before the suicide attacks on New York and Washington. The new IMF projections suggest it now expects recovery in the US to be slower and more painful than expected.
US Treasury Secretary Paul O'Neill later took issue with the IMF's estimate of 0.7 percent growth for next year, and said he had made a bet with Kohler that the forecast "was off by a lot."
News Thursday that the jobless total in the US has soared to an 18-year high added to mounting pessimism about the outlook for the world's biggest economy, however.
The number of people out of work and claiming benefits rose to 3.83 million in the week ending Nov. 3 -- the highest total since February 1983, although a fall in the number of fresh claims in the last week, to 444,000, suggested a slight easing in the rate of layoffs.
Europe's economy will not escape the slowdown in the US, Kohler warned, and the IMF is downgrading its forecast for European growth to 1.7 percent growth for this year, and 1.4 percent for next year, from previous estimates of 1.8 percent and 2.2 percent respectively. Again, this suggests the downturn will be longer lasting than optimistic projections earlier in the year had implied.
Welcoming last week's half-point interest rate cut by the European Central Bank, Kohler said that weak inflation in the 12-member eurozone "leaves room for further easing, if necessary."
Despite setting out a markedly more pessimistic assessment of the prospects for the world economy than the IMF made in October, Kohler said he remained sanguine about the medium-term prospects for the world economy as the concerted interest rate cuts by central banks started to take effect.
"Major fundamentals in the global economy are still good, and we should not confuse ourselves now by embarking on gloom and doom scenarios," Kohler said.
"What is needed now is to build confidence through sober analysis and sound policies, while making sure that we are prepared to deal with a worse outcome if necessary."
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
LANDSLIDES POSSIBLE: The agency advised the public to avoid visiting mountainous regions due to more expected aftershocks and rainfall from a series of weather fronts A series of earthquakes over the past few days were likely aftershocks of the April 3 earthquake in Hualien County, with further aftershocks to be expected for up to a year, the Central Weather Administration (CWA) said yesterday. Based on the nation’s experience after the quake on Sept. 21, 1999, more aftershocks are possible over the next six months to a year, the agency said. A total of 103 earthquakes of magnitude 4 on the local magnitude scale or higher hit Hualien County from 5:08pm on Monday to 10:27am yesterday, with 27 of them exceeding magnitude 5. They included two, of magnitude
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique