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IMF warns global economic slowdown entering ‘dangerous new phase’

Howard Schneider
Washington Post [1]
Sept 20, 2011

The world economy is entering a “dangerous new phase” of slowing growth and eroding confidence that threatens to undermine economic activity even further, the International Monetary Fund warned Tuesday in its primary annual forecast.

“Global activity has weakened and become more uneven; confidence has fallen sharply recently; and downside risks are growing,” the fund said in its World Economic Outlook, published ahead of this week’s annual meetings.

The report took aim at high public debt in the United States and Europe, particularly the 17-nation euro area’s inability to reach political agreement over how to deal with Greece’s plunge toward default and the continent’s weakened banking system.

At a press conference, IMF economic counselor Olivier Blanchard issued what he referred to as a “call to arms” for European governments in particular to shore up their banks and use stronger measures to secure the finances of highly indebted countries.

Full article here [1]