The worlds's largest developed economies have been struggling
to recover from the economic meltdown caused by financial
institutions" excessive risk taking andlax risk assessment.
Recovery efforts have weakened and downside risks have
increased In a 241 page report, the International Monetary
Fund (IMF) said that consumers and organizations have
curtailed their purchasing habits. Purchasing power has
been affected by high unemploymentand hoarding of cash by
companies and financial institutions refusing to fee funds
back into the private sector.
Growth was strong in 2010 but decreased in 2011. This
year's rehabilitation was affected negatively by the
Japanese earthquake, the euro zone debt crisis and the
U.S. oversized federal deficit.
THe world worries about Europe's, Japan's and the U.S.
government's inability to deal with high debt burdens.
Corporate and financial sectors are clueless about what
the next day will bring beyond more expensive monitoring.
The World Economic Outlook forecast for global growth was
toned down in 2011 and 2012 by 1 percent, down from 5
percent in 2010.
The IMF projections assume that Europe will be able to act
swiftly concerning Greece, Italy and other heavily indebted
nations. At the same time, the IMF based its forecasts on
the assumptions that U.S. policymakers will be able to come
to grips with reality and take action instead of continuinn
to disagres.
Sheila McKinney
