September 21 (CapitalVue) -- Today the International Monetary Fund (IMF) slashed its global economic growth forecast for this year by 0.3% and reduced next year’s by 0.5% to 4%, citing slow private sector demand, sovereign debt and bank crises, the Japanese earthquake and turmoil in the Middle East, reports Shanghai Securities News, citing the IMF.

The organization’s new forecasts are not out of step with the sentiment on Wall Street. The IMF cut its U.S. growth forecast for this year to 1.5% and to 1.8% next year, which for 2011 is a full percentage point lower than 3 months ago and 0.9% below its prior forecast for 2012. The 2011 view is a just shade below Wall Street views of 1.6% U.S. growth, though the IMF’s call for 2012 is more conservative than the 2.2% growth seen by many private sector economists.

The IMF warned that Europe must take more steps to avoid letting the debt crisis deepen. It predicts that the economic growth of 17 countries in Europe will be 1.6% this year, less than the forecasted 2% this June; the IMF raised Japan’s predicted growth rate to negative 0.5% this year and 2.3% next year.

The international organization downgraded economic growth in emerging economies to 6.4% this year and 6.1% next year.

IMF reduced its forecast for China’s economic growth to 9.5% this year and 9% next year.

Source: CapitalVue

Source:21cbh