IMF: World economy enters 'dangerous new phase'
IMF says global economy in 'dangerous new phase,' slashes growth forecasts for US and Europe
WASHINGTON (AP) -- The world economy has entered a "dangerous new phase," according to the chief economist of the International Monetary Fund. As a result, the international lending organization has sharply downgraded its economic outlook for the United States and Europe through the end of next year.
The IMF expects the U.S. economy to grow just 1.5 percent this year and 1.8 percent in 2012. That's down from its June forecast of 2.5 percent in 2011 and 2.7 percent next year.
To achieve even that still-low level of growth, the U.S. economy would need to expand at a much faster rate in the second half of the year than its 0.7 percent annual pace in the first six months.
Most economists expect growth of between 1.5 percent and 2 percent in the final two quarters. Though an improvement, it wouldn't be enough to lower the unemployment rate. The rate has been 9 percent or higher in all but two months since the recession officially ended more than two years ago.