IMF: Eurozone poses threat to global economy

Global economy is in the "danger zone" over the eurozone crisis, says IMF chief.


The eurozone is expected to face a shrink in its GDP by the end of 2012 contrary to the previous forecast of a growth of 1.1%. The global economy will grow at a rate of 3.25%, decreasing by 0.75% from the earlier value of 4%.


The British economy has had its growth rate cut to 0.6%, previously predicted to be 1.6%. Similarly, other eurozone countries including Germany have also seen a reduction in their growth estimates.


The US, on the other hand still stands at a 1.8% growth estimate made by the IMF, owing to the "recent strong  domestic data on jobs and manufacturing" (BBC News).


While emerging markets "have been quite resilient to shocks and developments in major economies in the past year, recent indicators have weakened significantly and the general business climate has deteriorated," says IMF.


"There are three requirements for a more resilient recovery: sustained but gradual adjustment, ample liquidity and easy monetary policy, mainly in advanced economies, and restored confidence in policymakers' ability to act."