Open letter to South Africa’s students‚ universities and government‚ represented by Minister in the .
The International Monetary Fund (IMF) yesterday increased its estimate of global losses from the financial meltdown to $1,4trillion (about R12,4trillion) and warned that the world's economic downturn was deepening.
"Declared losses on US loans and securitised assets are likely to increase further to about $1,4trillion," the IMF said.
In its quarterly assessment of global capital markets, the IMF said global economic activity was slowing down as growth in advanced economies decelerated and emerging economies started to lose momentum.
"Despite better-than-expected performance early this year, rising financial turmoil has led to a downgrade in the IMF's baseline forecast for global economic growth in 2008-09," it said.
The IMF called for "internationally coherent and decisive policy measures" to restore confidence and to avert a more protracted economic slowdown, but warned that central banks would need to continue injecting cash to calm the turmoil. "The risk of a more severe adverse feedback loop between the financial system and the broader economy represents a critical threat," the IMF said.
"The combination of mounting losses, falling asset prices, and a deepening economic downturn has caused serious doubts about the viability of a widening swath of the financial system," it said.
The IMF warned that overall risks to emerging markets have risen sharply as appetite for emerging assets has declined and capital outflows have intensified, leading to tighter liquidity conditions. - Reuters