IMF to cut growth forecasts on fallout from subprime crisis
IMF to cut forecast for world economic growth due to fallout from the subprime mortgage crisis.
By PTI |
LONDON: The International Monetary Fund will cut its forecast for world economic growth because of fallout from the subprime mortgage crisis that will weigh on US and global expansion, particularly next year.
"It's too early to quantify," IMF Managing Director Rodrigo de Rato told a press conference in Lisbon on Monday. While most of the reduction in the forecasts will come in the US, "we see consequences in Europe and Japan, but probably much more limited.
The slump in the US housing market caused by rising defaults on subprime mortgages is starting to spread from the domestic housing market to the broader economy as companies face rising financing costs as banks clamp down on lending.
The sudden increase in borrowing costs is now showing up overseas, raising the price tag on credit worldwide.
Rato called the situation "serious," adding that "we can expect it will affect somehow the world economy."
"It's too early to quantify," IMF Managing Director Rodrigo de Rato told a press conference in Lisbon on Monday. While most of the reduction in the forecasts will come in the US, "we see consequences in Europe and Japan, but probably much more limited.
The slump in the US housing market caused by rising defaults on subprime mortgages is starting to spread from the domestic housing market to the broader economy as companies face rising financing costs as banks clamp down on lending.
The sudden increase in borrowing costs is now showing up overseas, raising the price tag on credit worldwide.
Rato called the situation "serious," adding that "we can expect it will affect somehow the world economy."
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