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November 6, 2008

IMF Cuts Global Growth Forecast
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http://enews.voanews.com/t?ctl=1F2C0E0:A6F02AD83191E160DE7AAC645907BC1E21A4E82C900CD027&
 
Report says world economic growth will slow from 5 percent in 2007 to
just over 2 percent in 2009 
The International Monetary Fund says prospects for global growth have
deteriorated over the past month. A report issued Thursday by the IMF
says world economic growth will slow from 5 percent in 2007 to just over
2 percent in 2009.The report says many advanced economies will shrink
slightly next year, with the United States and Europe hit by tightening
financial conditions and falling confidence. The slowing growth is also
expected to hurt developing nations by cutting demand for the
commodities that are important to many of these economies. But the
report also says global action to support the economy may improve
growth. The report comes just after the Bank of England and the European
Central Bank slashed key interest rates in an effort to bolster the
battered economy. The Bank of England Thursday cut its benchmark lending
rate a sharp 1.5 percentage points, bringing the interest rate to its
lowest level in half a century - 3 percent. European Central Bank
officials also reduced!
  their benchmark rate by .5 percentage points, to 3.25 p City workers
walk by Bank of England in City of London, 06 Nov 2008ercent. The
British and European actions follow rate cuts by other central banks
around the world, aimed at making it easier for businesses to borrow the
money needed to expand their operations and hire new people. European
stock indexes were down sharply in midday trading, following the
announcements, and U.S. stock futures were also lower. Earlier, trading
on Russia's MICEX was suspended for an hour after stocks took a sharp
dive. Key Asian stock indexes also plunged after Japanese-based
automakers Toyota and Isuzu announced larger-than-expected cuts in their
full year earnings forecast. Also Thursday, France cut its economic
growth forecast for 2009 and 2010. Finance Minister Christine Lagarde
blamed the financial crisis for the damage to the French economy, and
said the growth forecast was the lowest ever made by the French
government.


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