IMF cuts global growth forecast

Sensing a global economic slowdown, the International Monetary Fund (IMF) has reduced its official growth outlook for the world's largest developed and emerging economies, according to a new report. The publication follows a week of tough financial news, including a broad sell-off in gold prices and dwindling revenue prospects for a number of big U.S. companies.

The global economy is expected to grow at a pace of 3.3 percent in 2013, down from 3.5 percent predicted late last year. Additionally, its forecast for 2014 has fallen to 4 percent from 4.1 percent. "Fiscal consolidation" efforts in the European Union, the United States and some Asian countries are primarily to blame, as public spending reductions are expected to impact growth margins. 

Additionally, the IMF release pointed to risks from national debt holdings to be another source of concern, as rising interest rates could squeeze the ability of certain countries to maintain their finances affordably.

"Risks from high sovereign debt generally limit the fiscal policy room for maneuver in most advanced economies, and fiscal adjustment must progress gradually to limit damage to demand in the short term," the brief stated.

According to NPR, Olivier Blanchard, the organization's top economist, said at a press conference following the data release that up to 2 percent of growth was lost due to the fiscal tightening. He refused to speculate as to whether there could be further forecast reductions if any additional measures are instituted.

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