IMF says world in recession, auto giants flop
Friday, 24 April 2009
WASHINGTON, Apr 23 (AFP): The International Monetary Fund painted a bleak picture of the world economy yesterday as top auto companies posted dismal results and Britain revealed massive debts and soaring unemployment.
The IMF forecast the global economy will contract a punishing 1.3 per cent this year and see a slow recovery in 2010, with Japan, the 16-nation eurozone, the United States and the former Soviet Union region particularly hard hit.
China and India are still set to grow by 6.5 and 4.5 per cent respectively.
"The global economy is in a severe recession inflicted by a massive financial crisis and acute loss of confidence," the IMF said in its six-monthly World Economic Outlook (WEO) report.
The IMF warned the outlook was "exceptionally uncertain," and risks could increase, estimating that the world economy was sliding into "the deepest post-World War II recession by far."
In a speech ahead of key global finance talks in Washington, US Treasury Secretary Timothy Geithner said the United States needed the rest of the world economy to recover and was not solely to blame for the crisis.
"We bear a substantial share of the responsibility for what has happened, but factors that made the crisis so acute and so difficult to contain lie in a broader set of global forces that built up" in recent years, he said.
The IMF's gloomy report came as Britain warned its public borrowing would balloon to a record 175 billion pounds (197 billion euros, 256 billion dollars) in 2009-10 -- almost double its previous level.
Britain's unemployment rate also jumped to 6.7 per cent-the highest level since the Labour Party came to power in 1997, weakening the government ahead of elections to be held by next year.
Even Roman Catholic leader Pope Benedict XVI stepped into the debate over global economic policy, telling followers in St Peter's Square in the Vatican that "greed" was at the heart of the crisis.
There was more encouraging news from Asia however, with Japan reporting that a slump in its exports was easing. The news came after new data from China also raised optimism that the Asian powerhouse may be enjoying a recovery.
"Exports have hit bottom," said Richard Jerram, chief Japan economist at Macquarie Securities. "The stage is set for a strong rebound in industrial production and exports in the second quarter of 2009," he predicted.
Tokyo's finance ministry said exports dropped 45.6 per cent in March from a year earlier, following a record 49.4 per cent dive in February.
The IMF forecast the global economy will contract a punishing 1.3 per cent this year and see a slow recovery in 2010, with Japan, the 16-nation eurozone, the United States and the former Soviet Union region particularly hard hit.
China and India are still set to grow by 6.5 and 4.5 per cent respectively.
"The global economy is in a severe recession inflicted by a massive financial crisis and acute loss of confidence," the IMF said in its six-monthly World Economic Outlook (WEO) report.
The IMF warned the outlook was "exceptionally uncertain," and risks could increase, estimating that the world economy was sliding into "the deepest post-World War II recession by far."
In a speech ahead of key global finance talks in Washington, US Treasury Secretary Timothy Geithner said the United States needed the rest of the world economy to recover and was not solely to blame for the crisis.
"We bear a substantial share of the responsibility for what has happened, but factors that made the crisis so acute and so difficult to contain lie in a broader set of global forces that built up" in recent years, he said.
The IMF's gloomy report came as Britain warned its public borrowing would balloon to a record 175 billion pounds (197 billion euros, 256 billion dollars) in 2009-10 -- almost double its previous level.
Britain's unemployment rate also jumped to 6.7 per cent-the highest level since the Labour Party came to power in 1997, weakening the government ahead of elections to be held by next year.
Even Roman Catholic leader Pope Benedict XVI stepped into the debate over global economic policy, telling followers in St Peter's Square in the Vatican that "greed" was at the heart of the crisis.
There was more encouraging news from Asia however, with Japan reporting that a slump in its exports was easing. The news came after new data from China also raised optimism that the Asian powerhouse may be enjoying a recovery.
"Exports have hit bottom," said Richard Jerram, chief Japan economist at Macquarie Securities. "The stage is set for a strong rebound in industrial production and exports in the second quarter of 2009," he predicted.
Tokyo's finance ministry said exports dropped 45.6 per cent in March from a year earlier, following a record 49.4 per cent dive in February.