‘IMF to cut growth outlook’

DHAKA: The International Monetary Fund will reduce its estimate for global growth this year on weakness in investment, jobs and manufacturing in Europe, the US, Brazil, India and China, Managing Director Christine Lagarde said.

‘The global growth outlook will be somewhat less than we anticipated just three months ago’, Lagarde said in a speech in Tokyo, reports Bloomberg.

‘And even that lower projection will depend on the right policy actions being taken.’

The new outlook will be announced in 10 days, after an April estimate of 3.5 per cent, she said.

Interest-rate cuts in China and Europe and the Bank of England`s boost to an asset-purchase program underscored the fragility of the global recovery as austerity measures and debt burdens weigh on advanced nations.

Lagarde is pressing for fiscal union in Europe to aid growth and financial stability as nations such as Greece wrestle with balancing their books.

The ‘key emerging markets’ of Brazil, China and India are showing signs of slowdown, Lagarde said. Those three countries along with Russia will comprise more than 20 per cent of the world economy this year, according to IMF data.

‘Over the past few months, the outlook has regrettably become more worrisome,’ Lagarde said. ‘Many indicators of economic activity - investment, employment, manufacturing - have deteriorated. And not just in Europe or the United States.’

The IMF has already lowered its US growth estimate to 2 per cent from April’s 2.1 per cent.

European Union leaders agreed at a June 28-29 meeting to loosen bailout rules, lay the foundations for a banking union and break the link between sovereign and banking debt through the direct recapitalization of lenders.

BDST: 2047 HRS, JUL 7, 2012

Edited by Robab Rosan, Cultural Affairs Editor