For decades, the IMF used to give economic advice to developing nations. The US and Europe were considered model nations to emulate. Well times have changed, now the IMF is warning the US and Europe to get their fiscal situation under control. If they don’t, there will be a global financial crisis.
SAO PAULO (Reuters) – The International Monetary Fund cut its forecast for U.S. economic growth on Friday and warned Washington and debt-ridden European countries that they are “playing with fire” unless they take immediate steps to reduce their budget deficits.
The IMF, in its regular assessment of global economic prospects, said that bigger threats to growth had emerged since its previous report in April, citing the euro zone debt crisis and signs of overheating in emerging market economies.
The global lender forecast that U.S. gross domestic product would grow an anemic 2.5 percent this year and 2.7 percent in 2012. In its forecast just two months ago, it had expected 2.8 percent and 2.9 percent growth, respectively.
Times have changed!
Tags: Debt Crisis, IMF
