IMF lowers economic outlook, warns of danger ahead

The International Monetary Fund has lowered its global growth outlook, warning that "the global economy is in a dangerous new phase." The IMF, a global financial institution comprising 187 nations, released excerpts from the latest edition of its World Economic Outlook Tuesday, ahead of its fall meeting in Washington this weekend. It now expects the world''s economic output to increase 4% in both 2011 and 2012, compared with growth of 5.1% in 2010, according to CNNMoney. In June, the IMF had forecasted slightly more robust growth rates of 4.3% for this year. The IMF also sharply reduced its forecast for economic growth in the United States this year to 1.5%, down from 2.5% in June. It also lowered its expectations for growth in 2012 to 1.8% from 2.7%. "Overall, global growth is continuing, but slowing down," IMF managing director Christine Lagarde said in a speech last week. "The advanced countries in particular are facing an anemic and bumpy recovery, with unacceptably high unemployment." In its report, the IMF called on European Union policymakers to quickly implement measures proposed in July to contain the eurozone''s debt crisis. The fund said euro area nations must honor commitments to enact long-term fiscal reforms and the European Central Bank should lower interest rates if the crisis continues.