IMF will warn of slowdown in global growth…(By Design, Kiddies…)
Growing instability in west likely to affect developing economies’ recovery this year
Saturday 17 September 2011
Growth across the world’s major economies is expected to be downgraded by the International Monetary Fund at its annual conference this week following a dramatic collapse in consumer and business confidence that has stalled investment and hit government finances.
The IMF will say in its World Economic Outlook that instability in Europe and the US has undermined the prospects for a strong recovery in the west and is expected to hit China, Japan and developing nations over the next six months, according to analysts.
While multinational companies retain healthy balance sheets and banks have steadily rebuilt their finances, a lack of confidence has held back investment and hurt the prospects for growth, the Washington-based thinktank and lender will argue.
Christine Lagarde, the new IMF head, is expected to repeat warnings she made last week that European leaders and the US Congress must act to prevent a further deterioration in growth prospects next year.
Lagarde, the former French finance minister, has said in a thinly veiled warning to UK chancellor George Osborne and Tea Party representatives in the US that it is dangerous to cut spending too quickly because it risked countries falling back into recession and suffering higher unemployment. She also warned that policies favouring the richest elements in society could trigger social unrest and undermine recovery efforts.