IMF offers bleak assessment of stalled recovery
TOKYO (AP) - Plagued by uncertainty and fresh setbacks, the world economy has weakened further and will grow more slowly over the next year, the International Monetary Fund (IMF) says in its latest forecast.
Advanced economies are risking recession, the international lending organisation said in a quarterly update of its World Economic Outlook, and the malaise is spreading to more dynamic emerging economies like China.
The IMF forecasts that the world economy will expand 3.3 per cent this year, down from the estimate of 3.5 per cent growth it issued in July. Its forecast for growth in 2013 is 3.6 per cent, down from 3.9 per cent three months ago.
Underpinning that bleaker scenario are the assumptions that Europe will continue to ease monetary policy and that the United States will avert a crushing blow to growth by fending off a so-called "fiscal cliff" that could result from a failure to reach a compromise on its budget law and tax cuts.