IMF: A US Default Would 'Seriously Damage' The Global Economy

The International Monetary Fund said a U.S. default would “seriously damage” the global economy, and it lowered its 2013 growth estimates for America,
Bloomberg reports.
“A longer shutdown could have sizable adverse growth implications,” the IMF said. “A failure to promptly raise the debt ceiling could also adversely affect financial markets and economic activity, with spillovers to the rest of the world.”

The Washington, D.C.-based group now sees average U.S. GDP growth of 1.6% for 2013 versus 1.7% prior, and 2014 at 2.6% versus 2.8% prior.

It also lowered its global growth forecasts 30 basis points to 2.9% for 2013 and 20 bps to 3.6% for 2014.

India and Mexico saw the largest growth cuts, -180 bps to 5.1% and -170 bps to 3.0% for 2013 respectively.

Gallup said this morning that its U.S. economic confidence index plunged to its lowest level in years.

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