IMF slashes global growth forecasts
The International Monetary Fund has slashed its growth forecasts for most major countries in 2012 and urged governments to adjust the “rhythm” of their austerity measures to avoid derailing economic recovery.
In an update of the forecasts in its autumn World Economic Outlook, the IMF said output in most major economies were, “decelerating but not collapsing”. It pinned much of the blame on the debt crisis in the eurozone, where it expects GDP to shrink by 0.5% during this year.
On the IMF’s central projection, “most advanced economies avoid falling back into a recession, while economic activity in emerging and developing economies slows from a high pace.” It is now expecting world GDP growth of 3.3% in 2012, down from the 4.1% it forecast in September.
However, the Washington-based lender warned that these projections are “predicated on the assumption that in the euro area, policymakers intensify efforts to address the crisis”.
It also called on governments to avoid imposing drastic spending cuts on already sickly economies. Fiscal tightening is necessary to correct the hefty debt burden left from the boom years, the IMF said, but it, “should ideally occur at a pace that supports adequate growth in output and employment”.
We should probably avoid electing representatives who ignore history, science, numbers and reality in order to pander to the lowest common denominator of our society.