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http://www.reuters.com/article/busin...39856620080409
IMF article: http://www.imf.org/external/pubs/ft/...RES040908A.htm
Full Report: http://www.imf.org/external/pubs/ft/...8/01/index.htm
WASHINGTON (Reuters) - The U.S. economy will tip into recession this year and there is a 25 percent chance world growth will drop to 3 percent or less -- a level that would be considered recessionary, the International Monetary Fund said on Wednesday.
The IMF said the global expansion of the last several years was fast losing ground in the face of a major financial crisis brought on by a downturn in the U.S. housing sector that continues "full blast."
While the IMF's latest World Economic Outlook puts world growth at 3.7 percent this year, the projection marked the second time in four months the global watchdog cut its forecast.
In October, it had looked for growth of 4.8 percent, a forecast it had lowered to 4.1 percent in January to try to account for the world's fast-spreading credit woes.
The IMF sees only a bit of a pick-up next year, with growth reaching 3.8 percent, somewhat slower than that following the 2001 U.S. recession.
In the United States, growth in economic output will skid from a subpar 2.2 percent in 2007 to a bare-bones 0.5 percent this year and 0.6 percent in 2009, the fund said.
"The U.S. economy will tip into mild recession in 2008 as the result of mutually reinforcing housing and financial market cycles, with only a gradual recovery in 2009," it said.
The brunt of the crisis will be felt in the United States and Western Europe, the IMF said... continued
The IMF said the global expansion of the last several years was fast losing ground in the face of a major financial crisis brought on by a downturn in the U.S. housing sector that continues "full blast."
While the IMF's latest World Economic Outlook puts world growth at 3.7 percent this year, the projection marked the second time in four months the global watchdog cut its forecast.
In October, it had looked for growth of 4.8 percent, a forecast it had lowered to 4.1 percent in January to try to account for the world's fast-spreading credit woes.
The IMF sees only a bit of a pick-up next year, with growth reaching 3.8 percent, somewhat slower than that following the 2001 U.S. recession.
In the United States, growth in economic output will skid from a subpar 2.2 percent in 2007 to a bare-bones 0.5 percent this year and 0.6 percent in 2009, the fund said.
"The U.S. economy will tip into mild recession in 2008 as the result of mutually reinforcing housing and financial market cycles, with only a gradual recovery in 2009," it said.
The brunt of the crisis will be felt in the United States and Western Europe, the IMF said... continued
Full Report: http://www.imf.org/external/pubs/ft/...8/01/index.htm