WASHINGTON, Oct. 8 (Xinhua) -- The United States, at the
center of an intensifying global financial storm, could face an economic
recession, the International Monetary Fund (IMF) said Wednesday.
The U.S. economy is now slowing fast and "is likely
to contract in the current quarter and into early 2009," said the IMF in its
latest World Economic Outlook report.
The world's largest economy rose 2.8 percent at an
annualized rate in the second quarter. Taking the most recent three quarters
together, however, the pace of growth averaged only 1.25 percent, well below
potential.
More importantly, available data for the
July-September period suggest a further slowdown and forward-looking indicators
-- such as consumer and business confidence and accumulating evidence of the
negative impact on credit of recent financial market disruptions -- suggest that
a recession is likely to happen, according to the IMF.
The IMF now projects that the U.S. economy will
decline in the final quarter of this year and the first quarter of 2009,
stabilize in the second quarter, and then embark on a gradual recovery.
On a year-over-year basis, growth is moderating from
2.0 percent in 2007 to 1.6 percent in 2008 and 0.1 percent in 2009.
The economy will only return to potential growth in
2010, the IMF said, adding that "risks around this forecast are to the
downside."
It said that particular concerns are that the credit
crunch could impose an ever-greater constraint on activity, that the house price
correction could extend into 2010, and that inflation pressures may prove more
persistent, limiting the Federal Reserve's room for maneuver.
"With a recession now looking increasingly likely,
the key questions are, how deep will the downturn be, when will a recovery get
under way, and how strong will it be?" the IMF said.
The key determinants of the short-term outlook will
be the effectiveness of recent government initiatives to stabilize financial
market conditions, as well as the behavior of U.S. households in the face of
rising stress, the depth of the housing cycle, and the extent to which inflation
concerns constrain monetary policy, according to the IMF.
The semiannual World Economic Outlook report came a
few days before the IMF and its sister institution World Bank hold their annual
meeting in Washington on Oct. 13.
IMF: Financial crisis takes
increasingly heavy toll on economic activity
WASHINGTON, Oct. 8 (Xinhua) -- Intensifying financial
strains are taking an increasingly heavy toll on economic activity, the
International Monetary Fund (IMF) said Wednesday.
One of the main channels for such macro-financial linkage
is through tightening bank lending standards in both the United States and
western Europe, said the IMF in its latest World Economic Outlook report.
IMF: Global economic growth to
moderate significantly
WASHINGTON, Oct. 8 (Xinhua) -- The International Monetary
Fund (IMF) Wednesday cut its projections significantly for global economic
growth this year and next, noting that the world economy is under stress due to
the ongoing global financial crisis.
"The world economy is now entering a major downturn in the
face of the most dangerous shock in mature financial markets since the 1930s,"
the IMF said in its latest World Economic Outlook report.
IMF: Growth in emerging, developing economies to
decelerate
WASHINGTON, Oct. 8 (Xinhua) -- Growth in emerging and
developing economies is projected to continue to decelerate in the second half
of 2008 and early 2009, according to the International Monetary Fund (IMF)
Wednesday.
While the downturn in the advanced economies is continuing
to deepen, "the emerging and developing economies have not decoupled from this
downturn," the IMF said in its latest World Economic Outlook report.
IMF: Western Europe struggling with
multiple shocks
WASHINGTON, Oct. 8 (Xinhua) -- Western Europe is
struggling with multiple shocks and some countries could face an economic
recession, the International Monetary Fund (IMF) said Wednesday in its latest
World Economic Outlook report.
"Western Europe is being hit by major shocks that are
weakening economic activity, notably extraordinary financial stress," the IMF
said.
IMF says economic cycle in Asia to experience more weakness
ahead
WASHINGTON, Oct. 8 (Xinhua) -- The International Monetary
Fund (IMF) said in its semiannual World Economic Outlook report released
Wednesday that the economic cycle in Asia is expected to experience more
weakness ahead as a result of slowing demand and the ongoing financial market
crisis.
"The economic cycle in emerging Asia started to turn in
early 2008, and more weakness is expected ahead in response to slowing demand
from advanced economies and growing strains in regional financial markets," the
IMF said in the report.
