Dangerous new phase

A reduction in estimates of global growth, from 4.3% for 2011 to 4% and from 4.5% for 2012 to 4%, is in itself a source of comfort, given the daily dose of alarming news from both the US and the EU. That, however, is an incorrect way to read the IMF’s latest World Economic Outlook (WEO) report released late evening yesterday. For one, the US growth forecasts have been cut by around 1 percentage point each for 2011 and 2012—that’s a 40% reduction in GDP growth for 2011 and 33% for 2012.

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