BBC NEWS Americas Africa Europe Middle East South Asia Asia Pacific Arabic Spanish Russian Chinese Welsh

 You are in: Business
Front Page 
UK Politics 
Market Data 
Your Money 
Business Basics 
Talking Point 
In Depth 

Commonwealth Games 2002

BBC Sport

BBC Weather

Tuesday, 25 September, 2001, 08:23 GMT 09:23 UK
IMF shrugs off recession fears
US shopping
The first figures on US consumer spending since the attacks are due on 25 September
The IMF has said it does not expect the global economy to fall into recession as a result of the impact of the terrorist attacks on the United States.

The US economy may slow further than previously expected but "we do not believe there will have been a recession" in 2001 or 2002, according to IMF deputy managing director Ann Krueger.

"We are still on track for economic growth to accelerate in the US sometime this year, (or) early next year", said IMF deputy managing director Ann Krueger.

The IMF will release its twice-yearly world economic forecast on Wednesday. The report is normally released ahead of the IMF annual meeting which was due to take place later this week, but has now been postponed.

Meanwhile, finance ministers from the G7 group of industrialised nations will hold a teleconference to discuss anti-terrorist measures, the US Treasury said late Monday.

Early indications

The first indications of whether US consumer spending has slowed since the attacks will come on Tuesday with the release of consumer confidence figures for September and weekly data on chainstore sales, known as the Redbook.

Consumer spending accounts for about two thirds of the US economy.

The IMF sees "an increased likelihood" of a weaker-than-expected performance from the world's largest economy in the third and fourth quarter of 2001, according to Ms Krueger.

"But then a sharper upturn will follow", she said.

Consumer spending, the one engine still boosting the US economy before the 11 September attacks, rose by the smallest margin in nine months in July despite the stimulus of $300 tax rebates.

G7 ministers to talk

Commerce Department figures showed that consumers spent a mere 0.1% more in July than June for a total of $7,085bn.

Waning interest in durable goods such as cars and household appliances was the key to the meagre increase, with spending down 1.1%, after a 2.3% rise in June.

Many analysts expect that US consumers will be even less willing to purchase major items in the wake of the attacks, being preoccupied instead with political uncertainties and fears of job losses.

A snapshot survey after the terrorist attacks showed that 10% were changing their spending plans, while 20% were reviewing their financial investments and 30% were cancelling travel plans.

The G7 finance ministers will use their teleconference to discuss "anti-terrorist actions in the financial field", said US Treasury Department spokesman Tony Fratto.

He also confirmed that a meeting of G7 finance ministers and central bankers due to take place in Washington this week on the sidelines of the cancelled IMF annual meeting would be rescheduled.

The meeting is being "rescheduled to allow for the development of a new agenda", he said.

Terror's impact

Signs of a slowdown

Rate cuts


Key players

See also:

28 Aug 01 | Business
US shares slide on weak data
14 Aug 01 | Business
US retail figures beat forecasts
26 Jun 01 | Business
US consumers remain upbeat
29 Jun 01 | Business
US growth slower than thought
11 May 01 | Business
US consumers defy recession
14 Mar 01 | Business
Can Bush avert recession?
17 Jan 01 | Business
US recession could be short-lived
06 Apr 01 | Business
Recession fears hit Wall Street
22 Dec 00 | Americas
US 'recession' row deepens
13 Sep 01 | Business
Will US consumer confidence fade?
24 Sep 01 | Business
Why consumer confidence matters
Internet links:

The BBC is not responsible for the content of external internet sites

Links to more Business stories are at the foot of the page.

E-mail this story to a friend

Links to more Business stories