The International Monetary Fund (IMF) last night said it expects to lower its global economic growth forecasts due to market turbulence that has battered stocks and bonds worldwide.
"There will be some downward revisions to our growth projections, more so next year than this year," said IMF spokesman Masood Ahmed. "The downward revisions are likely to be largest for the United States, but we will also see some impact in the euro area."
IMF spokesman
Mr Ahmed said it was too soon for a precise assessment on how the market mess, triggered by the souring US subprime mortgage sector, would affect global growth. The IMF will release its World Economic Outlook report in October.
The view comes one day after the Paris-based Organization for Economic Cooperation and Development reduced its forecast for US economic growth.
Earlier yesterday, both the European Central Bank and the Bank of England held interest rates steady, saying it was too soon to gauge the damage wrought by the global credit crisis.
The IMF's Ahmed said the market unrest came "after an exceptionally long period of benign conditions in international economic markets" and solid global growth, which "gives us a cushion against which we are working".
Growth in emerging economies as a whole remained "relatively robust," he said, although some countries may be vulnerable to financial market fallout, particularly those that rely heavily on external financing.