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IMF sees slower world growth, no recession

Stanley Fischer, first deputy managing director of the International Monetary Fund said on Saturday the IMF could cut its 2001 world economnic growth forecast to around 3.5 per cent from 4.2 per cent.

However, he told the annual meeting of the World Economic Forum that the world was still far from recession, predicting a pickup in US growth in the second half with full-year growth likely to be around 2.5 per cent.

"We are still a long way from a global recession," he said, adding that growth was still above rates seen in the early 1980s.

Fischer, speaking two days after Federal Reserve chairman Alan Greenspan said US economic growth had slowed down to "close to zero", told business and political leaders:

"The slowdown is happening. On current projections it will be a growth slowdown well short of the sort of recessions that were experienced in the early 90s or early 80s."

He noted the US was in the "fortunate position" of being able to cut rates further.

European economic fundamentals were strong and it also had scope to cut rates in response to a weakening of economic activity or a strengthening of the euro, as well as to implement further structural reforms.

Japanese output may have declined slightly in the fourth quarter of 2000, he added.

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