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The head of the International Monetary Fund has urged countries to ease back on financial cuts because of the impact they are having on growth.
According to the Financial Times (£), Christine Lagarde warned against bringing in too many spending cuts and tax increases at once, saying: "It's sometimes better to have a bit more time."
The IMF has predicted a huge contraction in Greece for this year and for 2013. Predictions for GDP in the Eurozone are -0.4 this year and 0.4 next year, but Greece falls way below this with the worst estimates in the world.
- –6.9% actual GDP in 2011
- –6.0% 2012 projection
- –4.0% 2013 projection
An overview of the International Monetary Fund's World Economic Outlook projections, as it downgrades its estimate for global growth for this year to 3.3%.
The International Monetary Fund has slashed its forecast for the UK economy's growth, it predicts it will shrink by 0.4% this year.
In July, growth of 0.2% was forecast for the year.
The IMF also cut its forecast for next year from 1.4% to 1.1%.
The International Monetary Fund (IMF) has said that the global economic recovery is weakening as it downgraded its global growth forecast to 3.3%, down from its July estimate of 3.5 %.
The IMF also cut its estimate for global growth in 2013 from to 3.6% from the 3.9% it forecast in July.
In its World Economic Outlook report, the IMF said:
"A key issue is whether the global economy is just hitting another bout of turbulence in what was always expected to be a slow and bumpy recovery or whether the current slowdown has a more lasting component".
"The answer depends on whether European and U.S policymakers deal proactively with their major short-term economic challenges."
Latest ITV News reports
Sir Mervyn King will concede there might be occasions when the Bank of England should 'aim off' the 2% inflation target.
It is the kind of message we have heard from the IMF before - think about having a Plan B ready, but don't press the button yet.