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Global economy slowing, warns IMF

india Updated: Jul 06, 2012 23:04 IST

International Monetary Fund chief Christine Lagarde on Friday warned that the global economy was slowing, with a soon-to-be published growth outlook lower than earlier forecasts.

“What I can tell you is that it will be tilted to the downside and certainly lower than the forecast that was published three months ago,” she told an economic forum in Tokyo.

In April, the IMF hiked its global growth forecasts to an annual rate of 3.5% this year, accelerating to 4.1% in 2013, up from the January forecast of 3.3% and 4.0% respectively.

Lagarde declined to elaborate on its upgraded assessment due later this month but said that the outlook since the last IMF forecast had “regrettably” become “more worrisome”.

The IMF had said its improved global forecast in April was due in part to better global financial conditions and easing fears about the euro zone debt crisis. “The outlook for the global economy is slowly improving again but is still very fragile,” it said at the time.

On Tuesday, the Washington-based IMF cut its growth forecast for the US economy and warned that the Obama administration could be slicing the deficit too fast for the weak economy. The IMF estimated 2012 US economic growth at 2.0%, down from an April forecast of a 2.1% expansion for the world’s biggest economy.

She also hailed recent “significant steps” to contain the euro zone crisis but warned that “more needs to be done”.