Senior fellow Alan Gelb is quoted in an article from United Press International on the IMF's decision to cut global growth forecasts.
WASHINGTON, Oct. 9 (UPI) -- The International Monetary Fund's decision to cut global growth forecasts for 2012 and 2013 came as no surprised to experts in the economic community who say that without strong fiscal policies to address increasing debt, some countries may be on the path to another recession.
The IMF's latest World Economic Outlook report, released Tuesday, lowered estimates for global growth to 3.3 percent in 2012 and 3.6 percent in 2013, from previous estimates of 3.5 percent and 3.9 percent. The report cited the debt crises in the eurozone and uncertainty over the "fiscal cliff" in the United States as drivers of the reduced forecast.
"In cutting the forecast the IMF is taking into account these developments in Europe and the likelihood that the U.S. can't continue to act as a motor. It's providing a signal that the times are going to be difficult," said Alan Gelb, a senior fellow at the Center for Global Development, a non-profit think tank.
Gelb and Chad Stone, chief economist at the Center on Budget and Policy Priorities, another non-profit, both said the actual fiscal cliff deadline is less concerning than the lack of long-term planning surrounding the deficit.
"The problem in the U.S. starts not so much with immediate fiscal cliff but with the credibility to deal with the longer-term problem," Gelb said.