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Current Events & Hot Topics Current Events & Hot Topics

Risks Of Global Economic Slowdown Are 'Alarmingly High,' IMF Warns

Posted by on Oct. 9, 2012 at 3:01 PM
  • 6 Replies
nd warns.

Published: October 09, 2012 by Mark Memmott

Saying that the global economic recovery "has suffered new setbacks, and uncertainty weighs heavily on the outlook," the International Monetary Fund today warned that the probability of "recession in advanced economies and a serious slowdown in emerging market and developing economies" next year have gone up.

The fund said its research indicates the risk of those things occurring in 2013 "has risen to about 17 percent, up from about 4 percent in April 2012."

The IMF trimmed its forecast for next year's global economic growth by 0.3 percentage points, to 3.3 percent. By the IMF's definition, the global economy can be in recession if growth is so weak that it doesn't support healthy growth in key indicators such as employment and production.

It also warned that things could be even worse if policymakers don't properly handle two looming potential crises. In a statement, it said that:

"The IMF said that its forecast rested on two crucial policy assumptions—that European policymakers get the euro area crisis under control and that policymakers in the United States take action of tackle the 'fiscal cliff' and do not allow automatic tax increases and spending cuts to take effect. Failure to act on either issue would make growth prospects far worse.

"The forecast said that monetary policy in advanced economies was expected to remain supportive. Major central banks have recently launched new programs to buy bonds and keep interest rates low. But the global financial system remains fragile and efforts in advanced economies to rein in budgetary spending, while necessary, have slowed a recovery."

The Wall Street Journal notes that:

"The latest report cites particular domestic issues as part of the reason that growth is slowing. That makes it difficult to revive growth through global policy measures. In China, for instance, growth is expected to slow to 7.8% this year, rather than hit its customary 10%-plus pace, because government authorities are looking to deflate a housing bubble and build a social-safety net rather than ramp up growth through a stimulus splurge."

[Copyright 2012 National Public Radio]
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by on Oct. 9, 2012 at 3:01 PM
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Replies (1-6):
eema.gray
by on Oct. 9, 2012 at 3:35 PM

BUMP!

Sisteract
by Whoopie on Oct. 9, 2012 at 3:39 PM

Notice how no one is here talking about this report?

How do the major candidates' economic plans dovetail with global issues?

How does foreign diplomacy, or lack there of, impact global economic issues and affect ultimate outcomes?. So many individual variables, yet a domino effect. 


Separation of church and state is for the protection of BOTH church and state.
Leading with hate and intolerance only leads to MORE hate and intolerance.
eema.gray
by on Oct. 9, 2012 at 3:42 PM

I've noticed the lack of conversation, even on this board.  Way more fun to argue about relatively minor issues.  :-(

Quoting Sisteract:

Notice how no one is here talking about this report?

How do the major candidates' economic plans dovetail with global issues?

How does foreign diplomacy, or lack there of, impact global economic issues and affect ultimate outcomes?. So many individual variables, yet a domino effect. 



"I am only one, but I am still one; I cannot do everything, but still I can do something; and because I cannot do everything I will not refuse to do the something that I can do." ~~ Edward Everett Hale 1822-1909
rfurlongg
by on Oct. 9, 2012 at 3:47 PM
In relation to the US this portion stood out to me:
"The IMF said that its forecast rested on two crucial policy assumptions—that European policymakers get the euro area crisis under control and that policymakers in the United States take action of tackle the 'fiscal cliff' and do not allow automatic tax increases and spending cuts to take effect. Failure to act on either issue would make growth prospects far worse."

Yet neither party realistically address the inevitable. Is this because they are responding to what people want to hear? Are "we" driving the conversation by not demanding real talk points?

"
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Sisteract
by Whoopie on Oct. 9, 2012 at 3:58 PM
2 moms liked this

It does feel like a game.

The way I see it, the 2 leading candidates are out there shilling for $$$ and the winner will be beholden to those donors post election [ wonder what the loser has to do in return]. I truly believe that those at the top drive what gets done and methods used. I have become very cynical over the last 3 election cycles.

Folks who think that either major candidate will fix what ails this country, in a way that is most beneficial to all, are going to be sorely disappointed.

I wish I could see an easy fix- I know money is not the answer.

Quoting rfurlongg:

In relation to the US this portion stood out to me:
"The IMF said that its forecast rested on two crucial policy assumptions—that European policymakers get the euro area crisis under control and that policymakers in the United States take action of tackle the 'fiscal cliff' and do not allow automatic tax increases and spending cuts to take effect. Failure to act on either issue would make growth prospects far worse."

Yet neither party realistically address the inevitable. Is this because they are responding to what people want to hear? Are "we" driving the conversation by not demanding real talk points?

"


Separation of church and state is for the protection of BOTH church and state.
Leading with hate and intolerance only leads to MORE hate and intolerance.
butlerro1013
by Bronze Member on Oct. 9, 2012 at 4:20 PM
1 mom liked this

Economics teaches us that double-digit growth is both inflationary and unsustainable, and that a couple of percentage points a year is healthy and stable.  We should be looking to have the kind of economy that focuses on sustainability with small increments of growth.  I'd rather have a decent economy for an infinite amount of time than grow rapidly and crumble in 20 years.

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