Global economy 'in danger zone'

12:53 PM No Comments

IMF: Global economy 'in danger zone' over euro crisis

Jose Vinals, IMF: "A failure to address underlying tensions could precipitate a global crisis"

The world's economy is "deeply into the danger zone" because of risks from the eurozone, the International Monetary Fund (IMF) has said.

The IMF predicts the global economy will grow by 3.25% in 2012, down from an earlier forecast of 4%.
The growth forecast for the UK economy has been cut to 0.6% from 1.6%.
But the eurozone is set for a "mild recession" in 2012, with GDP expected to shrink by 0.5%, compared with a previous forecast of 1.1% growth.
Shadow chancellor Ed Balls called for the government to rethink its austerity plan in the light of the IMF estimates.
"Last year the IMF was clear that if growth undershot expectations then the British government should reconsider the pace of spending cuts and tax rises which choked off our recovery well before the recent eurozone crisis, pushed up unemployment and has seen borrowing forecasts soar," said Mr Balls.
"Now the IMF has slashed their growth forecasts and confirmed that growth in Britain will indeed be much lower than they expected. And they have called on countries with low interest rates, like the UK, to reconsider the speed of their spending cuts and tax rises."
In response, the government said the IMF predictions matched those made by the independent Office of Budgetary Responsibility, which informs government economic policy.
"The IMF has downgraded its growth forecasts for all the major economies, reflecting the deterioration in the global outlook since their last forecasts in September," said a Treasury spokesperson.

"Their expectations for UK growth are in line with those of the Office of Budgetary Responsibility, and stronger than for the other major European economies."

Eurozone growth Growth estimates have been reduced for the main eurozone countries, including Germany, which is widely seen as the powerhouse of the region.
Germany is forecast to grow 0.3% in 2012, down from the 1.3% originally predicted in September.
France is expected to show 0.2% growth in 2012, down from 1.4%.
However, the IMF stands by its 1.8% growth prediction for the US, based on recent strong domestic data on jobs and manufacturing.
Risk of 'spillovers' Emerging markets, such as central and eastern Europe and Asia, could also be hit by the eurozone crisis.
The IMF said: "While these markets have been quite resilient to shocks and developments in major economies in the past year, recent indicators have weakened significantly and the general business climate has deteriorated."
The IMF said Europe's most pressing challenge was to restore confidence and put an end to the crisis in the euro area.
It added that world economies needed "decisive and consistent policy action" to improve the current financial environment.
"There are three requirements for a more resilient recovery: sustained but gradual adjustment, ample liquidity and easy monetary policy, mainly in advanced economies, and restored confidence in policymakers' ability to act."
Separately, EU economic affairs commissioner Olli Rehn said he expected a "moderate recession" across Europe in the first half of this year.
On Monday, IMF chief Christine Lagarde warned the global economy could fall into an economic spiral reminiscent of the 1930s unless action was taken on the eurozone crisis.
In its update to its September report, the IMF warned that the "United States and other advanced economies are susceptible to spillovers from a potential intensification of the eurozone crisis".

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Explosions heard in Nigeria's Kano

10:17 AM Kano Bombing Explosions North Nigeria No Comments

Reports of explosions and gunfire near police station in city where attacks last week killed at least 178 people.
 
Explosions and gunfire were reported early on Tuesday from an area near a police station in the northern Nigerian city of Kano, where co-ordinated attacks and gun battles last week killed about 178 people.
The AFP news agency reported early on Tuesday that its correspondent heard a series of blasts and gunshots coming from an area where a mobile police headquarters is located. Details were not immediately clear and police were not available for comment.
A resident reported a similar account.
"I was awoken from sleep by explosions and gunshots coming from the mobile barracks and police station opposite," the resident said, adding that they had stopped after several minutes.
"It's terrifying ... It's too dangerous to go out, besides there is curfew."
Sporadic gunfire could still be heard after the explosions halted.
A nighttime curfew is in effect in the wake of Friday's bomb attacks and fierce gun battles between Boko Haram fighters and police in Kano, Nigeria's second largest city.
On Monday, Nigerian police said they had found several cars and vans filled with explosives in the city.
"The police were on a stop-and-search today and in two of the checkpoints, the Boko Haram members on sighting the checkpoints abandoned their vehicles and ran," a high-level police officer told the Reuters news agency, asking not to be named.
"The vehicles were later checked and the cars were loaded with explosives. Two brand new Hilux open pick-up vans were also found packed with explosives in the Bompai area of Kano."
Unexploded car bombs
Authorities discovered at least 10 unexploded car bombs, including one near a police station in Kano, as well as around 100 other explosive devices through the day on Monday.
Al Jazeera's Yvonne Ndege, reporting from Kano, said the cars, which were discovered at a petrol station near the central police station, were "filled with explosive devices that were clearly designed to go off on Friday" but did not.
In reaction to the discovery of the bombs, and potential for the discovery of more explosives, our correspondent said police had been asking for citizens to report any suspicious activities or unattended vehicles parked near symbols of Nigerian authority such as police stations and government buildings.

Police say they have found locally made explosives in several cars after Friday's attacks [Reuters]

Magaji Musa Majiya, a police spokesperson, said officers were able to disarm the car bombs.
According to police figures released on Monday, 29 policemen, three intelligence officers, two immigration officers and scores of civilians were among the dead in last week's attacks.
"Nearly all Nigerian security agencies are involved [in trying to figure out] how Boko Haram were able to co-ordinate the attacks. They are trying to beef up authority around the symbols of Nigerian authority" our correspondent said.
In Maiduguri, a town in the northeast that has been at the centre of Boko Haram activity, a policeman was shot dead on Monday.
"The policeman was on patrol along with his colleague in a vehicle when the Boko Haram opened fire and shot him dead," said Simeon Midena, the commissioner of police.
"As usual the killers just disappeared into the crowd."
Maidiguri patrols
The joint military task force has increased its defences and widened its patrols in Maiduguri in recent days.
On Sunday, the military killed four suspected Boko Haram gunmen in Maiduguri and found explosives in their car, a military spokesman said.
Boko Haram, which was formed in Maiduguri in 2002, has killed hundreds of people in the last year, mostly in and around its home state of Borno, though its attacks have been spreading across the north of Africa's most populous nation.
The group, loosely modelled on Afghanistan's Taliban, focuses its attacks mostly on the police, military and government, but has also targeted Christians more recently.
It says it is fighting enemies who have wronged its members through violence, arrests or economic neglect and corruption.
Nigerian President Goodluck Jonathan has been severely criticised for not getting a grip on a group that he says has infiltrated the police, military and all areas of government.

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