IMF, OECD see signs of slowdown in U.S. economy

NF Reporter · 04-06-2007, 08:36 AM

Reuters - The International Monetary Fund has revised down its forecast for U.S. economic growth by 0.4 percentage points, a German newspaper reported in its online edition on Friday.

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waltky · 09-07-2007, 12:50 AM

World-wide recession possible...

World economy 'facing slowdown'
Thursday, 6 September 2007, The outlook for the US economy is set to worsen

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Global economic growth is likely to be dampened by the turbulence which has swept world markets, the International Monetary Fund (IMF) has said.

The IMF said it would be revising down its growth projections - with this year being more affected than 2008. The US would see the largest impact, with some parts of Europe also set to endure lower growth, it added.

Its comments came a day after the OECD warned the US economy would slow sharply in the second half of 2007. The Organisation for Economic Co-operation and Development's World Economic Outlook report is due for release in October.

Potential vulnerability

waltky · 09-16-2007, 01:46 AM

People startin' to hunker down...

Further signs of US economic pain
Friday, 14 September 2007, Shoppers are getting more cautious

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Retail sales and industrial output both slowed in the US last month, as the economy felt the strain from the housing slump and credit squeeze. Shop sales grew 0.3% in August, below market expectations of a 0.5% rise and below July's 0.5% increase. Industrial output rose 0.2%, the slowest pace in the past three months.

Analysts said the figures reinforced the case for the Federal Reserve to cut interest rates when it meets to decide on borrowing costs next week. US stock markets fell on the news, the Dow Jones index dropping as much as 76 points after opening in New York, but paring some of its losses later in the session to trail by 15.8 points at 13,409.1.

Eyes on the Fed

When it meets on 18 September, the Fed will be under enormous pressure to act to lower the cost of consumer borrowing. Many believe such a move would limit the wider economic fallout from the current turbulence in financial markets triggered by the crisis in the sub-prime mortgage market.

More BBC NEWS | Business | Further signs of US economic pain

waltky · 01-26-2008, 07:52 PM

Maybe we'd have a better chance if it weren't for all the outsourcing...

IMF chief predicts 'serious slowdown' of US economy
Jan 26, 2008 - The chief of the International Monetary Fund (IMF) Dominique Strauss-Kahn said here Saturday that he expected a 'serious slowdown' of the US economy.

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'Whatever the answer on a recession, what is clear is there will be a serious slowdown in the United States,' Strauss-Kahn, the IMF's managing director, told a panel at the annual meeting of the World Economic Forum.

As 2,500 political and business leaders gathered at the Swiss ski resort, the meeting was clouded by mounting concern over the US economic outlook in the aftermath of the subprime mortgage crisis, with some economists even warning of a recession.

Strauss-Kahn said the IMF was scheduled to update its economic forecast next week, which was certain to have a lower growth figure for the US. He added that although the developing economies would largely perform well, it was unlikely that they would be immune from the US slowdown because of their substantial links with the US economy.

IMF spokesman Masood Ahmed told reporters Friday he saw a period of below-potential economic growth for the US, saying the recent sharp interest rate cut by the Federal Reserve was appropriate and helpful.

IMF chief predicts 'serious slowdown' of US economy

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State of Union: Economy is key
January 26 2008: Bush will lobby for stimulus plan and may call for more measures to ease housing crunch and cut corporate tax rates. On Saturday he reiterated his hope that the bill will pass swiftly.

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The state of the slowing economy and how to energize it - now and beyond - will be a focal point of President Bush's State of the Union address on Monday. Indeed, he pledged during Saturday's Presidential radio address to tout the bipartisan stimulus plan during next week's speech; "...I believe that with swift action, we can give our economy the boost it needs to continue expanding and creating new jobs for our citizens." He also reiterated his hope that the plan will be enacted swiftly.

Bush, in his last year of office, is unlikely to make any new economic proposals on Monday night, as he has done in past addresses. Last year, for instance, he called for a change in how the government taxes money used to buy health insurance, and he asked Congress to set a goal of reducing American gasoline consumption by 20 percent over 10 years. "I think there will be a pretty significant emphasis on what they're doing in the immediate term to shore up the economy," said Scott Hodge, president of the Tax Foundation, a research group advocating for a simpler tax code and lower taxes. "There's so much anxiety in the markets and in business. I think he'd want to assure people they've taken the appropriate actions."

This year, before discussing the war in Iraq, Bush is expected to promote and call for swift passage of the $150 billion economic stimulus package brokered between House leaders and Treasury Secretary Henry Paulson. The stimulus deal may face some resistance in the Senate. Some Democratic senators are unhappy that their House colleagues gave up on the party's push to extend unemployment benefits in addition to offering consumer rebates and business tax breaks. The economic proposal, announced last week, also includes two housing measures intended to make it easier for consumers to obtain mortgages or refinance expensive subprime loans.

Beyond the stimulus plan.

waltky · 01-29-2008, 08:59 PM

Subprime crisis affecting world economy...

IMF says world economy slowing down
Tuesday 29th January, 2008 - The IMF has revised down its forecasts for economic growth in 2008, but has ruled out a recession in the U.S. and globally. It does however warn the situation could get worse.

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Buffeted by recent financial market turbulence and a weakening U.S. performance, world growth is projected to slow to 4.1 percent in 2008, down from an estimated 4.9 percent last year, the IMF said in its quarterly update for the global economy. Financial market strains originating in the U.S. subprime sector, and associated losses on bank balance sheets, have intensified, while the recent steep sell-off in global equity markets was symptomatic of rising uncertainty, the IMF stated.

While projecting growth of above four percent for the global economy, the IMF said there was a risk that the ongoing turmoil in financial markets would further reduce domestic demand in the advanced economies with more significant spillovers into emerging market and developing countries. 'Growth in emerging market countries that are heavily dependent on capital inflows could be particularly affected, while the strong momentum of domestic demand in some emerging market countries provides upside potential,' the IMF's World Economic Outlook Update said.

A number of other risks remain elevated. 'Monetary policy faces the difficult challenge of blancing the risks of higher inflation and slower economic activity, although a possible softening of oil prices could moderate inflation pressures,' the IMF said. Commenting on the U.S. economy, the IMF said economic growth 'appears to have slowed notably in the fourth quarter of 2007, with recent indicators showing weakening of manufacturing and housing sector activity, employment, and consumption.'

U.S. growth is projected by the IMF to slow to 1.5 percent this year, down from 2.2 percent last year. The IMF has said that the recent move by the U.S. Federal Reserve to cut the Federal funds rate by 75 basis points was 'appropriate and helpful.' Growth has also slowed in western Europe and confidence indicators have generally deteriorated. For the euro area, growth on an annual basis is projected at 1.6 percent in 2008, down from 2.6 percent last year.

More IMF says world economy slowing down

waltky · 07-26-2008, 12:50 AM

European economy flatlines...

Economists say Europe is flat
Thursday 24th July, 2008 - Economists have warned that the 15-nation eurozone economy is teetering on the brink of recession.

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Business activity in the eurozone has almost come to a halt according to a group of leading indicators. The eurozone purchasing managers index slid more sharply than expected in July to 47.8 points from 49.3 in June, according to an initial estimate.

Separate business confidence surveys from eurozone economic heavyweights Germany, France and Italy have added to fears that Europe will not escape recession as it struggles with record inflation, tight lending conditions and weakening export demand.

German business sentiment fell to near a three-year low point in July, and France's INSEE business climate index fell in July for the sixth month running to hit the lowest level since May 2005.

The Italian business confidence level dropped to a near-seven year low. In Spain, the government slashed its economic growth forecast for this year to 1.6 percent from 2.3 percent as a housing boom failed.

Economists say Europe is flat

waltky · 08-11-2008, 11:51 PM

Spreading to Europe...

Economic Data Suggests Germany Is Sliding Toward A Recession
August 11, 2008 - Second quarter data for Germany point to chances that Europe's largest economy is sliding toward a recession.

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Factory orders slipped by 2.9 percent in June from the previous month and slumped by 5.1 percent for orders overseas. As a result, production at German factories grew by an anemic 0.2 percent in June.

The Economics Ministry, in a statement, said, "Demand from abroad is slowing more sharply than domestic demand, which is also on a downward trajectory... As a result prospects for industrial production all in all have worsened." However, it is not only in Germany where the economic slump is felt, but across the euro zone, where Deutsche output accounts for one-third of total production.

Jonathan Loynes, chief European economist for Capital Economics, confirmed in a report that "the euro zone will be the first major economy to fall into recession." Germany's June export went down 2.9 percent from the previous month and 8.4 percent compared to a year ago.

Economic Data Suggests Germany Is Sliding Toward A Recession | AHN | August 11, 2008

waltky · 08-14-2008, 11:52 PM

EuroZone slipping as a whole...

Europe's biggest economies stop growing
August 14, 2008 -- Euro-zone growth braked sharply in the second quarter; Major economies of Germany, France and Italy shrank; High fuel and food prices holding back consumer spending

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Euro-zone growth braked sharply in the second quarter as major economies Germany, France and Italy shrank, EU statistics showed Thursday, with high fuel and food prices holding back consumer spending. Growth in the 15 economies that share the euro currency contracted by 0.2 percent from the first quarter, expanding just 1.5 percent from the same period a year ago, the EU statistical agency Eurostat said in a first estimate that it may change at a later date. Germany, the region's largest economy, shrank 0.5 percent in April-June from the previous quarter with France and Italy both down 0.3 percent. German growth dropped for the first time in nearly four years. The world's biggest exporter had so far weathered the economic storm brewing in Europe despite high inflation hitting spending at home and a slowing world economy and a strong euro hurting exports to the U.S.

No euro nation is yet officially in recession by showing two consecutive quarters of negative growth. Eurostat did not give a figure for Ireland, once a booming Celtic tiger economy, which contracted in the first quarter. But worse seems yet to come. Business and consumer confidence in the euro area plunged to the lowest level in more than five years in July. The euro jobless rate also started to climb in April from an all-time low it reached in December. Separately, Eurostat said that July inflation was still high but better than anticipated, posting a figure of 4 percent -- the same as June -- that it revised downward from a record high of 4.1 percent.

The rate was driven by higher prices for package holidays, housing services and transport fuel, it said. High inflation is the euro economy's biggest problem as it eats into household spending -- the main engine of growth -- and hikes costs for companies and exporters. Workers, facing higher prices at the gas pump and grocery store, are demanding more pay in the face of European Central Bank concerns that this would fuel an inflation spiral. The ECB has reason to worry. Stripping out soaring fuel and food prices, underlying inflation is running worryingly high at 2.6 percent -- above the ECB's recommended guideline of just under 2 percent.

The bank in June hiked interest rates from 4 percent to 4.25 percent to try to cool inflation even though this risks slowing growth by increasing the cost of borrowing money in a tight credit market still suffering from the subprime banking crisis. The 27-nation European Union also saw growth fall by 0.1 percent from the previous quarter, up just 1.7 percent from a year ago. Only one EU country is now in recession: the previously fast-growing Baltic economy of Estonia. Growth was minus 0.9 percent in the second quarter and down 0.5 percent in the first. Denmark also risks recession. Eurostat has no second quarter figure but the country posted growth of minus 0.6 percent in the first quarter.

Source

waltky · 10-03-2008, 07:16 PM

France feelin' effects of global slowdown...

France slips into recession - report
October 03, 2008 : FRENCH leaders scrambled to reassure consumers, voters and investors today, after the official statistics agency warned that the eurozone's second largest economy had slipped into recession.

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The French economy shrank by 0.3 per cent in the second quarter of the year, and on Friday the Insee agency forecast that gross domestic product would drop by a further 0.1 per cent in both the remaining quarters of 2008. Economists define a recession as two successive quarters of negative growth but the government, desperate to maintain public confidence in the face of the global slowdown, steered deliberately clear of the term.

"Finance Minister Christine Lagarde now regards the risk of negative growth in autumn for the second quarter in a row as real," her ministry announced, confirming Insee's estimates in a statement Friday. But neither Ms Lagarde, nor the French chairman of the European Central Bank, Jean-Claude Trichet, would confirm that the slowdown had tipped into recession for the first time since 1993. "ECB experts tell us that we have slowing growth," he said on the French radio station Europe 1.

"I will not use any word other than that - slowing growth with significant risks that growth may become even weaker." Budget Minister Eric Woerth noted that taking into account the whole of 2008, the economy ought to grow by one per cent. "There's a technical and statistical definition, and there's the reality of things," he said, when asked if he would define the situation as a recession. But the press and the opposition had no such reticence.

More France slips into recession - report | Business Breaking News | News.com.au

waltky · 10-04-2008, 11:14 AM

European leaders meet to discuss credit crisis...

IMF: Europe must act on credit crisis
4 Oct.`08 - European leaders meet in Paris to discuss economic crisis; Nicolas Sarkozy to meet Gordon Brown, Angela Merkel and Silvio Berlusconi; Most of the leaders at the summit are against a Europe-wide bank bailout

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European leaders are meeting in the French capital to discuss their approach to global financial crisis. French President Nicolas Sarkozy planned to meet with British Prime Minister Gordon Brown, German Chancellor Angela Merkel, and Italian Prime Minister Silvio Berlusconi on Saturday. Also expected to attend was Luxembourg Prime Minister Jean-Claude Juncker who heads the Eurogroup, comprising the finance ministers of the 15 countries using the euro. European Commission President Jose Manuel Barroso and European Central Bank President Jean Claude Trichet were also expected at the summit.

Sarkozy's office said he planned to meet with International Monetary Fund Director-General Dominique Strauss-Kahn in the afternoon, before the summit begins, to discuss a European response to the financial crisis. Strauss-Kahn has said he wants the IMF to become an international regulatory agency that monitors and enforces global financial standards. Europe has been hit with bankruptcies and stock declines since the crisis unfolded in the United States last month. Europe has welcomed the approval in the U.S. Congress of a $700 billion financial industry bailout. However, most of the leaders at the summit are against a similar Europe-wide bailout.

Sarkozy has denied France was backing the creation of a special fund to rescue any crisis-hit European banks despite the French finance minister floating the idea. Prior to the meeting, Brown said he wanted a $21 billion European fund to help small businesses through the economic downturn. The European Central Bank left its key interest rate unchanged Thursday, but it and the Bank of England are under increasing pressure to cut rates quickly in the face of declining economic activity and an increase in unemployment.

Source

waltky · 10-09-2008, 04:27 AM

IMF blamin' U.S.

Forecasters see U.S. leading global downturn
Wed., Oct. 8, 2008 WASHINGTON - IMF predicts credit crisis will cut world economic output sharply

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The world economy will slow sharply this year and next, with the United States likely sliding into recession reflecting mounting damage from the most dangerous financial jolt in more than a half-century. The International Monetary Fund, in a World Economic Outlook released Wednesday, slashed growth projections for the global economy and predicted the United States — the epicenter of the financial meltdown — will continue to lose traction.

"The world economy is now entering a major downturn in the face of the most dangerous shock in mature financial markets since the 1930s," the IMF said in its report. The IMF now projects that the global economy, which grew by a hardy 5 percent last year, will lose considerable speed, slowing to 3.9 percent this year. It is forecast to weaken even more — to just 3 percent — next year, marking the worst showing since 2002. In the past, the IMF has called global growth of 3 percent or less the equivalent to a global recession.

The IMF's projection was made before the Federal Reserve and six other major central banks from around the world slashed interest rates Wednesday in an attempt to prevent a financial crisis from becoming a global economic meltdown. The Fed reduced its key rate from 2 percent to 1.5 percent. In Europe, which also has been hard hit by the financial crisis, the Bank of England cut its rate by half a point to 4.5 percent, while the European Central Bank sliced its rate to 3.75 percent.

More Forecasters see U.S. leading global downturn - World business - MSNBC.com

waltky · 10-26-2008, 12:37 AM

Oops! Just a big misunderstanding...

IMF director cleared over affair
Sunday, 26 October 2008 - International Monetary Fund director Dominique Strauss-Kahn is cleared of abuse of power after his affair with a colleague.

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The IMF board said Mr Strauss-Kahn's affair had been "regrettable" but that he would stay in his post. The managing director apologised this week for his brief liaison with IMF former senior economist Piroska Nagy. The controversy comes as the IMF deals with the worst financial crisis since the Great Depression of the 1930s. "The executive board noted that the incident was regrettable and reflected a serious error of judgment on the part of the managing director," the IMF's board of member countries said in a statement.

An investigation found, it added, that Mr Strauss-Kahn's affair with Ms Nagy, who worked in the IMF's Africa department as a senior economist until taking a buyout in August, had been consensual. In a statement to accompany the IMF board's findings on Saturday, Mr Strauss-Kahn again apologised for his actions. "I very much regret this incident and I accept responsibility for it," he said.

"I have apologised for it to the board, to the staff of the IMF and to my family. I would also like to reiterate my apology to the staff member concerned for the distress this process has caused." The IMF chief's wife, French television personality Anne Sinclair, said earlier that she and her husband had put what she called a "one-night stand" behind them. Ms Nagy, a Hungarian-born economist, is now working for a bank in London.

BBC NEWS | Europe | IMF director cleared over affair

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IMF Won’t Fire Director for Sexual Affair
October 25, 2008 WASHINGTON - The International Monetary Fund said Saturday that it would stand by its managing director, Dominique Strauss-Kahn, despite concluding that he had shown poor judgment in a sexual affair with a subordinate.

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After receiving a report from an outside law firm, the executive board of the fund said there was no evidence Mr. Strauss-Kahn had abused his power or shown favoritism in his brief relationship with a senior official at the fund, who later resigned to take a job in London. Still, the longest-serving member of the board, A. Shakour Shaalan, described the affair as a “serious error of judgment” on the part of Mr. Strauss-Kahn, 59, a former French finance minister who took charge a year ago and is now steering the fund through the most serious global financial crisis in decades.

In a statement, Mr. Strauss-Kahn said, “I am grateful that the board has confirmed that there was no abuse of authority on my part, but I accept that this incident represents a serious error of judgment.” The inquiry, by the firm Morgan, Lewis & Bockius, concerned a brief relationship between Mr. Strauss-Kahn and Piroska Nagy, then an official in the Africa department. Ms. Nagy left the fund in August as part of a buyout of nearly 600 employees instituted by Mr. Strauss-Kahn to cut costs.

At issue was whether Mr. Strauss-Kahn had sexually harassed Ms. Nagy, pressed her to leave the fund or used his authority to give her preferential treatment in her buyout. In all cases, the report found no evidence. Last week, Mr. Strauss-Kahn issued an apology to the fund’s staff, Ms. Nagy and his wife, Anne Sinclair, a French television journalist. Ms. Sinclair wrote on her personal Web log that her husband’s affair had been a “one-night stand,” and that the couple had “turned the page.”

More http://www.nytimes.com/2008/10/26/world/26imf.html?hp