The International Monetary Fund announced it is marking down its global growth projection for 2001 by a little over half a percent to 2.6%. A similar reduction has been made in the outlook for 2002. The IMF foresees that the DR economy will do better than the average. A 3% growth is forecast for 2001 and a 5.6% growth for 2002, the highest in Latin America. In its World Economic Outlook report, the IMF explains that the global reduction reflects macroeconomic developments that were already in the making prior to the 11th September events. They already pointed to weaker growth in just about every region of the globe, both this year and next. Among factors mentioned are a synchronized slowdown, the continued weakness in the IT sector, the deteriorating situation in Japan, and the worsening financial conditions in emerging markets. Nevertheless, the IMF says there are a number of reasons for cautious optimism. It points to a sizable amount of policy stimulants in the pipeline in most major economies, even more than anticipated a few weeks ago. Second, economic fundamentals across the globe are considerably stronger than they were a few years ago, reflected in lower inflation, stronger fiscal positions, more flexible exchange rates and lower external vulnerabilities in emerging markets. It says the terrorist attack should not substantially affect underlying productivity growth in the United States . To read the report, see http://www.imf.org/external/pubs/ft/weo/2001/02/index.htm
