US Economic Meltdown: IMF says U.S. heads for recession- by Lesley Wroughton
The U.S. economy is headed for recession this year and there is a 25 percent chance world growth will drop to 3.0 percent or less, a level that would be considered recessionary, the International Monetary Fund said on Wednesday. The IMF said the global expansion of the last five years was fast losing ground in the face of a major financial crisis brought on by a downturn in the U.S. housing sector that continues "full blast." The IMF's latest World Economic Outlook put world growth at3.7 percent this year, the second time in four months the global watchdog cut its forecast. Johnson said the IMF expects U.S. house prices to drop in the order of 14 to 20 percent to the end of 2008. "That is a fairly large decline by historical standards in the United States; it is a very large decline, but is not unprecedented compared to the experience of other advanced economies in past 30, or so, years," he added.
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