IMF to pare global growth forecasts: Lagarde
07 Jul 2012
International Monetary Fund head Christine Lagarde said yesterday that the IMF would pare its global growth forecasts in the next month, adding that a weaker global economy would mean more trouble Japan as the yen would grow strong.
The world economic outlook will be "tilted to the downside," Lagarde said at a news conference in Tokyo. "Tilted means there's not an enormous variation, but it's a negative variation," she said, though she did not provide figures or details of which regions would be hit.
The IMF's world economic outlook undergoes revision on a quarterly basis and in the latest update in April, the fund projected a global growth at 3.5 per cent for 2012, revised upwards from a 3.3 per cent forecast in January. It forecast 4.1 per cent growth in 2013, up from 3.9 per cent. The updated report is to be released on 16 July.
As the euro-zone debt crisis continues with no end in sight, the fund leader voiced concerns over the outlook for the global economy and c called for more concerted action on the part of US and European leaders.
Fears that the global slowdown was getting worse prompted policy responses from central banks on Thursday, as the ECB reduced its key interest rate to a historical low of 0.75 per cent and the People's Bank of China lowered a one-year yuan lending rate to 6 per cent. The Bank of England also decided to go for a larger bond-buying program.
Lagarde said she did not know if the moves were coordinated, but said the global action showed that "central banks are facing similar issues."
