IMF Lowers Global Growth Expectations
Friday, June 17, 2021 10:50 AM

Global economic growth expectations were revised downward today by the International Monetary Fund. The IMF expects 4.3 percent growth and blamed the usual suspects, Europe's debt crisis and weak U.S. growth. Those factors pose a greater danger to the fragile global recovery than originally expected, the IMF said. But the IMF believes global activity will perk up in the second half of the year.

The Greek debt crisis seems to be getting worse as European leaders seem unsure how to proceed and Greek political officials seem to lack the necessary resolve. The greater concern is a spreading debt crisis that affects the remainder of Europe.

The IMF's projections put U.S. growth at 2.5 percent, 0.3 percent lower than anticipated. High commodity prices, Japan's natural disasters and tornadoes in the U.S. are all mentioned. Sluggish domestic growth was countered by better-than-expected prospects for Germany and France.

Japan's problems are expected to slow growth by 0.7 percent to 2.1 percent for the year.

Emerging markets, however, are expected to grow at a robust 4.5 percent in 2012.

The IMF is pushing for cost cuts and repairs to the financial sectors in developed nations and a better response to rising asset and commodity prices in developing nations.