The International Monetary Fund (IMF) has added its voice to those of the World Bank and the United Nations in warning of a global slowdown and increased financial risks flowing from the eurozone crisis.
Revising its forecast for global growth in 2012 to 3.3 percent—0.7 percentage points lower than its September forecast—and warning of outright recession in Europe, the IMF said world recovery was threatened by “intensifying strains in the euro area and fragilities elsewhere.” Growth began to decline in the fourth quarter of 2011 “as the euro crisis entered a perilous new phase.”
While there had been higher than expected growth in the advanced economies, these developments were not expected to sustain significant momentum. In view of the often repeated claim that “emerging markets” will provide the basis for a new expansion of the world economy, the IMF’s comments on these regions were particularly significant.
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