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IMF warns Europe is global recession risk

IMF warns Europe is global recession risk
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As it cut its outlook for global growth, the International Monetary Fund warned that the eurozone debt crisis is escalating and dragging down the world economy.

The Washington-based lender called for urgent action to support growth in order to restore confidence and avoid another recession.

Olivier Blanchard, the International Monetary Fund’s chief economist, said: “The world recovery, which was weak in the first place, is in danger of stalling. The epicentre of the danger is Europe, but the rest of the world is increasingly affected.”

The IMF believes the eurozone will slip into a mild recession this year, with output contracting by about 0.5 percent.

It maintained its 1.8 percent growth forecast for the United States this year but reduced its projection for Japan to 1.7 percent.

The IMF’s growth forecast for the entire world for this year is 3.3 percent, down from four percent back in September. It said the outlook had deteriorated in most regions.