WASHINGTON, Oct 16 (AFP): Global finance chiefs gather this week with the impact of US housing and credit woes spreading worldwide, exchange rate tensions rising and new agendas being carved out at the IMF and World Bank.
Meetings of the Group of Seven (G7) finance ministers followed by annual gatherings of the International Monetary Fund and World Bank are being held against a backdrop of slowing global growth, but comments from key leaders suggest there is no reason to panic.
IMF officials nonetheless have said they expect to lower their forecast for global economic growth as well as estimates for major economies including the United States and the Eurozone.
Sources said that the IMF's World Economic Outlook would lower its global forecast to 4.8 per cent growth from a previous estimate of 5.2 per cent.
The IMF's outgoing head Rodrigo Rato said in an interview with the Financial Times that the global credit squeeze that began with subprime US housing failures may not be over.
"Problems are going to come to the real sector, come to (government) budgets-that is something we keep telling people," he said.
Rato said that it would be "a few months, probably into next year" before the availability of credit returned to normal levels in the markets, which was "going to have an impact on growth."
"The US is going to slow down ... Growth in Europe looks less strong than before, and in Japan too," said Rato, who will be succeeded as IMF chief by former French finance minister Dominique Strauss-Kahn at the end of the month.
Other than the impact of the credit squeeze, some finance chiefs are worried that the weak dollar and strong euro will end up hurting a number of economies.
Global finance leaders gather as economic clouds darken
FE Team | Published: October 17, 2007 00:00:00 | Updated: February 01, 2018 00:00:00
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