Monday, November 10, 2008

IMF : 2009 is year of recession


International Monetary Fund (IMF), Thursday, predicted economic growth will dwindle next year under the pressure of credit that forced European banks cut interest rates tribe. In the revised economic projections which made less than a month ago, the IMF said the economy in developed countries are now shrink 0.3 percent in 2009, after a previously estimated 0.5 percent growth. That is lower than the estimated growth of 0.8 points to be 2.2 percent.

"The prospect of world growth to worsen during the last month because of the chaos in the financial sector still continues and the producers and consumers trust is decline," said the IMF. "The production in the developed countries is estimated to have contraction for the full year 2009, the first decreasing after the war period," said the 185 financial institutions, a report in the performance of the world economy to October.

Next year, almost all economies in the developed countries will facing a contraction; U.S. (0.7 percent), Japan (0.2 percent), Regions of Europe (0.5 percent), UK (1.3 percent). Only Canada, which grew 0.3 percent.

Chairperson of the IMF economists, Olivier Blanchard, said will be lobbying the developed and the growing countries (G-20) for "expansion of the fiscal world."
The IMF's implementing director, Dominique Strauss-Kahn, will attend the meeting leaders of the G-20 financial end of this week in Sao Paulo, a high-level meeting before the G-20 that gathered U.S. President, George W. Bush, 15 November in Washington. Being asked which countries most expected to do the fiscal action, other IMF economists, Joerg Decressin, said, the U.S., Europe and especially Germany, and China.

European central bank (ECB) and Bank of England cut their interest in a dramatic escalation of efforts to prevent recession. When the ECB decided to lower down the loan interest of half a percent to be 3.25 percent points, the Bank of England also down 1.5 percent points to 3 percent, which according to the analyst is confusing and that the things are worse than previously thought.

"The current fear is more egregious situation can be estimated from the first," said Joshua Raymond, a strategic market in the City Index. UK economic is on recession phase after the collapse contraction in the third quarter for the first time since 1992 and the European Commission estimate that the same fate awaiting 27 EU countries at the end of the year.

ECB President, Jean-Claude Trichet, said he can not avoid trimming : "I can not avoid that we will again lower interest rates." Two other European countries that do not use the euro, Denmark and Switzerland, also lower interest rates.  Canadian PM, Stephen Harper, said he will ask the leaders of the G-20 to make "selective improvement" on the national financial regulations and to agree to "some of the regulations is misleading and early warning at the international level ... not a large-scale improvements.

Leaders of Ukraine, Thursday, received from the IMF standby loan worth 16.4 billion dollars on Wednesday. IMF says will held a press conference on the standby loan to help Hungary 12.5 miilar euros (16.18 miliardolar U.S.), after more than 3,200 lost their jobs because of the financial crisis.

Expectations focussed on the new U.S. president, Barack Obama, to be able to fix the financial markets which destroy the market in Asia, Europe, U.S.. Wall Street plunged more than 5 percent, on Wednesday, while the Dow Jones Industrial Average down 4.63 percent at the end of the trading session and the Nasdaq declined 3.78 percent.

"After shining subsequent presidential election .. it is not prolonged," said Patrick O'Hare at "Wall Street cast a little time to restore attention to the economic slump and the focus is still deceive."

In Europe, the index of leading stock on the London FTSE 100 down 5.70 percent, the CAC 40 in Paris down 6.38 percent, and Frankfurt DAX down 6.84 percent. Hong Kong share prices closed 7.1 percent lower, Seoul down 7.6 percent, and the Nikkei in Tokyo anjlok 6.53 percent. The impact of a decline in Japan, the second largest economy in the world, visible when Toyota cut the estimated annual profit of more than two-thirds. Toyota said net profit is now estimated down 68 percent, the fisrt decline during the nine years. The financial crisis, had a negative impack on the real economy in the world, and automotive markets, especially in developing countries has a contraction very quickly, "said Toyota executive vice president, Mitsuo Kinoshita.

"This is a difficult situation to estimate."