Financial Times: IMF sees greatest shock since 1930s

[marmar]

IMF sees greatest shock since 1930s
By Alan Beattie in Washington

Published: October 8 2008 16:14 | Last updated: October 8 2008 16:14


The financial crisis will drive down global economic growth to its lowest since 2002 with a big risk it will drop even further, the International Monetary Fund has warned.

Though Olivier Blanchard, the fund’s chief economist, said that the chance of another Great Depression was “nearly nil”, the IMF said that the US and European economies were mainly already in or close to recession.

“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. “The situation is exceptionally uncertain and subject to considerable downside risks.”

The fund said that global growth was likely to slow to 3.9 per cent growth in 2008 and 3 per cent in 2009, sharply down from 5 per cent growth last year. Some economists regard 3 per cent or 2.5 per cent global growth as equivalent to a world recession, given the trend rates of growth in the global economy, but Mr Blanchard said that such definitions were unhelpful.

Mr Blanchard said that Wednesday’s co-ordinated interest rate cuts from the major economies were “definitely a step in the right direction”, though declined to say whether more reductions would be needed in the short term. “More may be needed, and if so we hope it is done,” he told reporters. “Fifty basis points (cut) is not nothing.” .......(more)

The complete piece is at: http://www.ft.com/cms/s/0/c5db5c1c-9549-11dd-aedd-000077b07658.html

[SammyWinstonJack]

1. And just what role did the IMF play in all of this?

[nadinbrzezinski]

4. So far IN THE US, NONE... and pray that they don't

seen them at work

[SammyWinstonJack]

6. Thanks, was wondering if their dirty paw prints were on any of this.

[nadinbrzezinski]

2. Nor to the wary, a DEPRESSION would be 10 % or more GNP

reduction

Why the IMF is being careful

Now I personally will say that I expect this one to be DEEP and take all of the first term of the Obama administration

[ixion]

3. The stock market has pulled back 40% in the last year

but still it's just "close to" a recession. :eyes:

[nadinbrzezinski]

5. Recessions and depressions are defined by real world Gross National Product

contraction

And the Dow Jones is a late sign of trouble...