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IMF Chief: Global Economic Outlook 'Gloomy'

International Monetary Fund (IMF) Managing Director Christine Lagarde
IMF Managing Director Christine Lagarde says the world economic outlook is "quite gloomy," and will require action by all countries to improve -- starting with nations in debt-hit Europe.

The head of the International Monetary Fund, speaking at the U.S. State Department in Washington, warned that unless the problems are dealt with decisively, the global economy may eventually have to face the same threats that pushed the world into the Great Depression in the 1930s.

"The world economic outlook at the moment is not particularly rosy,” Lagarde said. “It is quite gloomy, and pretty much wherever your eyes will go, it's down, downside risk, revision downward, slower growth than expected, higher deficit than predicted, and public finances that are not in particular good condition. And that is pretty much true the world over."

Lagarde said "there is no economy in the world, whether low-income countries, emerging markets, middle-income countries or super-advanced economies, that will be immune to the crisis."

Lagarde's comments came as the ratings firm Fitch on December 15 downgraded the viability of at least six major global banks, citing increased challenges to their business and the prospect of financial turmoil.

Fitch lowered the long-term ratings on Bank Of America and Goldman Sachs in the United States, British bank Barclays, French bank BNP Paribas, German bank Deutsche Bank and Swiss bank Credit Suisse.

compiled from agency reports

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