The International Monetary Fund cut its forecast for world economic growth, saying that the economic recovery will slow as governments cut their budgets.

The IMF cut its outlook for the U.S. economy to 2.2% growth in 2011, from a previous estimate of 2.9%.

"The rate of expansion is beginning to moderate," the IMF said in its World Economic Outlook report. "Much of the weakness of this recovery is due to sluggish personal consumption."

Elsewhere, the outlook is brighter. China is expected to grow by 9.6%, compared with 10.5% in 2010. Indian growth is expected to be around 8.4% in 2011.

The global economic recovery remains fragile, the IMF said.

"The financial sector is still vulnerable to shocks and growth appears to be slowing as policy stimulus wanes," in advanced economies, the report said.

The IMF also cited the possibility of a sovereign debt crisis "inflicting major damage on the recovery." Governments across the world have increased their debt levels as they upped spending to fight the economic slowdown.

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It has been indeed great last 5-7 years for emerging economies. They have been challenging developed economies very efficiently. Specially China and India are at their best in terms of overall GDP growth. There are still concerning credit issues in these two countries but in the next few years, when the recovery is at its peak, these two countries will be reap the rewards.

October 07 2010 at 5:00 AM Report abuse rate up rate down Reply

This news with the job loss numbers should really impact the stock market but notice how it doesn't. How do you spell rigged ?

October 06 2010 at 1:15 PM Report abuse rate up rate down Reply

the grouth will realy slow down now because nobody is watching the oil prices when your money has to go in your gas tank there will not be much left over. we have a worlk wide over supply of oil but wall street wants to make end of year profits. just like they did to start this we have any one with the balls to tell them that is enough. i do not think we do

October 06 2010 at 11:46 AM Report abuse rate up rate down Reply
1 reply to puppydrum21's comment

The government is quite worried about the price of crude. If energy gets too expensive it will delay "recovery." Watch the ways they manipulate the value of the $ when the price of crude gets above US$80, then read all the bu-lshi- reasons the mainstreet media gives for the current price of oil.

October 06 2010 at 1:22 PM Report abuse rate up rate down Reply

The old saying, learn to live in your means. ED

October 06 2010 at 9:43 AM Report abuse rate up rate down Reply