The International Monetary Fund (IMF) is about to join the parade of individuals and institutions adopting a dimmer view of the 2012 global economy. In a speech today in Washington, the IMF’s managing director, Christine Lagarde, said:
It may well be that central banks will have played a significant role in pulling the global economy out of this great recession. But we should not get ahead of ourselves.
In July, the IMF had projected global GDP growth for 2012 at 3.5% and 3.9% in 2013. Lagarde said that it is likely that the IMF will cut its projections, but she did not specify a number.
She also cautioned that the uncertainty still choking the global economy is holding down growth in both developed and emerging economies. About the U.S. she had this to say:
[T]he current uncertainty presents a serious threat for the United States and, as the world’s largest economy, for the global economy. We all hope that political clarity emerges soon, and with it, actions to avoid the fiscal cliff and, also, a concrete plan to bring down debt gradually over the medium-term.
Lagarde remains concerned about the eurozone and repeated her message that the EU policy makers still need to work on creating a real banking union and to ease credit conditions for the weaker economies of the eurozone.