IMF downgrades global growth forecast

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.

International Monetary Fund managing director Christine Lagarde
International Monetary Fund managing director Christine Lagarde Credit: REUTERS/Regis Duvignau

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."

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IMF warns about 'damaging cuts'

The head of the International Monetary Fund has urged countries to ease back on cuts because of the impact on growth. It has previously warned the global economic recovery was weakening as government policies have failed to restore confidence.