(Adds previous forecasts in third paragraph.)
Dec. 1 (Bloomberg) -- The International Monetary Fund will probably lower its global growth forecasts next month as the European debt crisis rocks financial markets and slows output, a spokesman said.
Since the latest projections were released in September “there’s been a marked slowdown in economic activity,” particularly in Europe, IMF spokesman Gerry Rice told reporters in Washington today. “We will likely be revising downwards the forecast” near the end of January, he said.
The IMF in September cut its forecast for global growth to 4 percent this year and the same amount for 2012, predicting “severe” repercussions if Europe failed to contain its debt crisis. The turmoil has since worsened, with Italian and French bond yields rising and Germany failing to attract bids for 35 percent of bonds it offered for sale Nov. 23.
Rice also said the lender will meet Dec. 5 to authorize the next 2.2-billion euro ($3 billion) disbursement to Greece under a joint bailout plan with the European Union. An IMF team will go to Athens Dec. 12-16, he said.
The IMF is not in talks with Italy about any funding, Rice said. There’s no date set yet for an unprecedented mission that was agreed to last month to audit the country’s efforts to cut its debt, he said, as the IMF wants to take into account “important deadlines” coming up for Italy. The review will be quarterly and similar to the yearly assessment of the nation’s economy, he said.
The Italian Cabinet will approve on Dec. 5 a package of debt-reducing measures and structural reforms aimed at boosting economic growth and balancing the budget in 2013, Prime Minister Mario Monti has said.
European heads of government also meet on Dec. 9 in Brussels, with Germany pushing for governance changes that would tighten enforcement of budget rules.
European finance ministers said this week they would seek a greater role for the IMF alongside their own bailout fund in their latest effort at taming the euro zone’s sovereign debt turmoil. The IMF is co-financing bailouts to Greece, Portugal and Ireland.
Asked whether the European Central Bank could lend funds to the IMF, Rice said that while it’s legally feasible for central banks to do so, no discussions are taking place on the subject.
The IMF is confident that member states will increase the fund’s resources when and if needed, Rice said. Managing Director Christine Lagarde has said the $390 billion currently available may not suffice to meet loan demands if the global outlook worsened.
--Editors: Kevin Costelloe, Carlos Torres
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