The IMF said yesterday it was scaling back its projections for economic growth in the US and Europe following recent turmoil on global stock markets tied to the US housing downturn.
Rising US home foreclosures and a persistent housing slump have triggered a US credit crunch which has unsettled global markets and raised concerns about a possible US economic slowdown.
'There will be some downward revision to our growth projection, more so next year than this year,' Masood Ahmed, a spokesman for the International Monetary said.
'We can already say that the downward revisions are likely to be the largest for the US but we will also see some impact in the euro area.'
The spokesman did not reveal how much the IMF expected to trim its growth estimates, but said fresh assumptions would likely be released in mid-October ahead of the IMF and World Bank annual meetings.
In a July report, the IMF revised higher its projections for global growth in 2007 and 2008 to an annualised clip of 5.2% respectively, compared with a prior estimate of 4.9%.
It also cut its US gross domestic product (GDP) forecast for 2007 to an annualised 2%, down from 2.2%, while maintaining its expected growth outlook of 2.8% for next year.
Eurozone growth was pegged at 2.6% in 2007 and 2.5% in 2008.
However, concerns about US and global growth have intensified since August when major banks, financial firms and hedge funds revealed hefty losses linked to mortgage-backed securities issued on Wall Street.
