IMF May Cut Global GDP Forecast Below 3.3%

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The International Monetary Fund, and in particular chief Christine Lagarde, may cut its current forecast for 2013 GDP growth below its current estimate of 3.3%. She made comments about the possibility during a speech.

The announcement is another nail in the coffin of optimism about the chance of a wide recovery this year. Both a slowing of the economy in China — where some experts believe GDP growth could drop to 6% — and a persistent and deep recession in Europe, cannot be offset by a very weak U.S. recovery. And Japan’s economy, the third largest in the world, has shown choppy improvement at best.

Actions by central banks, most recently in the United Kingdom and European Union (ECB) have shown that these organizations have no belief in a recovery. The Fed made similar moves a month ago. Interest rates in the largest economies will stay low, as long as bankers believe that a new global recession could begin.