The following article was posted on the ABC a short time ago.
IMF to cut US growth forecast
The IMF says it expects to cut its US economic growth forecasts as the plunging stock market raises a new threat to the recovery.
"While the outlook is still broadly favourable, the downside risks have intensified," the International Monetary Fund said in a report after annual talks with the US economic authorities.
IMF staff had envisaged real gross domestic product rising from 2.5 per cent in 2002 to about 3.25 per cent in 2003.
"However, recent data releases and other developments, including the sharp decline in equity prices in recent weeks, have exacerbated the downside risks to the outlook for both personal consumption and business investment," it said.
"The likelihood, therefore, is that downward revisions to the growth projections would be made in the context of the forthcoming World Economic Outlook (due for release in September)."
IMF directors say in an accompanying assessment that turbulent financial markets had increased the level of uncertainty surrounding the US economic outlook.
Robust
US President George W. Bush insists the basis of the US economy remains robust.
"I am an optimist about our economy and I should be. The fundamentals are strong. Interest rates are low, monetary policy is sound," Mr Bush said.
"The foundation for growth is strong in America, and we'll continue to work in more ways to foster economic vitality," he said.
Mr Bush says he has sought to rebuild battered confidence in companies by signing into law corporate accountability legislation on June 30.
He says he believes the measure will help the unemployed.
"If somebody is looking for work and work is not available, we need to do something about it by focusing on job creation," Mr Bush said.
"Part of that is to make sure there is confidence in the private sector. I was pleased the other day to sign a bill, a corporate responsibility bill, that says, 'If you're in charge of a business, you have the responsibility to your shareholders and your employees to tell the truth, and if you don't, you will be held accountable'."
