Opening IMF presser, economists say US now in recession

Описание: (10 Apr 2008)

1. Wide shot of International Monetary Fund (IMF) economists walking into news conference
2. Cutaway of press
3. SOUNDBITE: (English) Simon Johnson/IMF Chief Economist
"In the United States, economic growth has nearly stalled. Against the backdrop of weak financial market confidence, we expect consumption to remain sluggish in the coming quarters due to deteriorating labour market conditions, slow growth in disposable incomes, higher energy costs and tighter constraints on household borrowing. Notwithstanding aggressive easing by the Federal Reserve and a timely fiscal stimulus package, significant strains in housing and credit markets are likely to be protracted."
4. Cutaway of press
5. SOUNDBITE: (English) Simon Johnson/IMF Chief Economist
"We now expect global growth will slow to 3.7 percent in 2008. That is half a percentage point lower than our January quarterly update forecast and well below the 4.9 percent growth seen in 2007. Our projected growth rate for the annual average growth in 2009 is 3.8 percent, but I would stress that we expect a recovery to take place during 2009."
6. Various cutaways of press
7. SOUNDBITE: (English) Simon Johnson/IMF Chief Economist
"The principle downside risk comes from the possibility that financial strains could deepen. Sentiment in financial markets is improved in recent weeks, since the Federal Reserve's strong actions with regard to investment banks. But we have seen how strains in markets can quickly become reinforcing, and the possibility of a negative spiral or financial decelerator remains real."
8. Wide shot of press, pan to wide of IMF panel
9. SOUNDBITE: (English) Simon Johnson/IMF Chief Economist
"While the improvement in the US current account is helping to address global imbalances, and we think the dollar adjustment remains orderly, we are concerned by the uneven pattern of exchange rate movement around the world. Some large surplus countries have experienced appreciation in their real effective exchange rates over the past twelve months, but large current account surpluses still need to be addressed and the framework established just over a year ago by the multilateral consultation remains relevant."
10. Wide shot of Johnson speaking on panel

STORYLINE:

The world economy will slow sharply this year, according to an International Monetary Fund forecast, with the United States sliding into a recession amid housing, credit and financial slumps.

The International Monetary Fund, in a World Economic Outlook released on Wednesday, slashed growth projections for the United States - the epicentre of the woes - and the global economy as a whole.

Speaking at a Washington news conference to release the report, IMF chief economist Simon Johnson said, "In the United States, economic growth has nearly stalled," and added that "we expect consumption to remain sluggish in the coming quarters".

Economic growth in the United States is expected to slow to a crawl of just 0.5 percent this year, which would mark the worst pace in 17 years, when the country last suffered through a recession, the global finance body said.

The outlook predicted the US will suffer a "mild'' recession in 2008, and it won't fare much better next year.

The IMF predicted the US economy will grow by a feeble 0.6 percent in 2009, when measured by an annual average.

Many private economists and members of the US public believe the country has already fallen into its first recession since 2001. For the first time, Federal Reserve Chairman Ben Bernanke acknowledged last week that a recession was possible.












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