Euro Crisis : IMF Warning for Europe

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The International Monetary Fund (IMF) has warned the worst of the euro crisis may be yet to come, as it cut its global growth forecast again this week.

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The organisation warned predicted growth rates could be slashed further if Europe’s policy makers do not act fast enough, and/or with enough force to stamp out the region’s on-going debt crisis.

The latest estimates saw the IMF trim its 2013 forecast for global economic growth to 3.9% – down from the 4.1% figure foreseen in April.

The UK was the recepient of the most dramatic growth rate cuts, with GDP now expected to grow by just 0.2 per cent this year. Growth in 2013 is set to reach 1.4 per cent, down 0.6 percentage points from April’s prediction.

That compares with US growth forecasts of two per cent in 2012 and 2.3 per cent in 2013, each down 0.1 percentage point on the previous outlook.

The productive capacity of emerging market, ‘BRIC’ nations would likely be lower than previously believed according to the IMF experts, meanwhile the US was warned against letting tax breaks and spending projects expire this year.

 

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