The International Monetary Fund still sees the United States averting recession, despite the latest developments, an IMF spokesman said Thursday. "We still see a period of below-potential growth as the most likely scenario for the US," spokesman Massood Ahmed said at a news conference.
The spokesman said that recent upheavals in the economic landscape had led the Fund to delay Friday's scheduled publication of its revised forecast on global growth until next week. "In the last three weeks or so there's been quite a lot of developments both in markets and in policies and we are trying to make sure we incorporate all these developments in our numbers," Ahmed said.
The IMF will publish an update on its twice-yearly World Economic Outlook (WEO) report in the "middle of next week," he said, adding the precise date would be announced later. A report on global financial stability, which was to have been published with the WEO update, also was delayed to the middle of next week. In the latest WEO report, published in October, the IMF predicted the world economy would grow by 4.8 percent in 2008, slowing from a robust 5.2 pace in 2007.
Since then, global financial turmoil has roiled markets as a severe US housing slump and tight credit are increasingly pressuring the world's biggest economy, leading some economists to say it is tipping into recession. Ahmed said the IMF stands by its view that the US economy will not contract in the near term, and reiterated the Fund's praise of the US Federal Reserve's decision Tuesday to slash its key interest rate by three quarters of a percentage point. In a statement after the Fed federal funds rate cut, the IMF spokeman had called the reduction "appropriate and helpful."
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