Global Recession Risk Rises

IMF Lowers Growth Forecasts, Warns New Downturn Would Be Tougher to Tame

By SUDEEP REDDY and BOB DAVIS, WSJ

TOKYO—The global economy risks skidding toward recession just three years after pulling out of the previous one, the International Monetary Fund warned, adding that fighting a renewed world-wide downturn will be much more complex than it was in 2009.

"Risks for a serious global slowdown are alarmingly high," said the IMF's World Economic Outlook report, which was released here Tuesday ahead of the fund's annual fall meeting. It was its bleakest assessment of global growth prospects since the 2009 recession.

The fund expects the world economy to expand just 3.3% this year and 3.6% in 2013, as growth slows in nearly every major nation and political uncertainties threaten recoveries in the U.S. and euro zone. That is a revision downward of 0.2 percentage point for 2012 and 0.3 percentage point for 2013 from its July forecast.

"No significant improvements appear in the offing," the IMF said. The global economy grew 3.8% in 2011 and 5.1% in 2010.

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