August 1, 2012
LIA Monthly Economic Report - Slow growth for U.S. economy
By: Dr. Pearl M. Kamer, LIA Chief Economist
U.S. economic growth is continuing to slow, weighed down by anemic global growth, deepening economic troubles in Europe, waning U.S. business investment and growing consumer caution. Preliminary figures indicate that real GDP increased at an annual rate of only 1.5% in the second quarter of this year. This was even slower than the first quarter growth rate of 2.0%.
The global economy is expected to grow at an annual rate of only 3.5% this year according to a recent report by the International Monetary Fund. The IMF expects the U.S. economy to expand by only 2% this year and projects slower growth for emerging economies like Brazil, India and China. The IMF report cited mounting global risks from the euro-zone debt crisis and noted that borrowing costs for countries like Spain and Italy are surging. Moreover, investors in countries at risk of default are fleeing into safer assets abroad. The IMF expects the euro-zone economy to shrink by 0.3% this year, led by a 1.9% decline in Italy and a 1.5% decline in Spain.
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