Morning Brief: IMF sees more doom ahead

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So much for “green shoots.” The IMF poured cold water on springtime optimism yesterday with a “substantial downward revision” of its January forecast for the world economy. The Fund now predicts a 1.4 percent contraction in the world economy in 2009 with only 1.9 percent growth the year after.

The predictions were especially dire for the EU, which contract 4 percent this year, according to the forecasts. FT’s Lex noted the wide disparity between the IMF’s numbers and forecasts by other central banks and economists. Passport’s Annie Lowrey has more details.

Japan reported its first trade deficit since 1980 yesterday. However, the fall in the country’s exports does show signs of slowing. Positive signs also include an uptick in exports to China and the U.S.

With the world’s finance minister meeting in Washington this weekend to build on agreements made at last month’s G-20 meeting, Treasury Secretary Timothy Geithner said that it’s critical that “governments keep providing support for demand,” even with some signs of stabilization. The U.S. government will begin briefing banks on the results of its “stress tests” tomorrow.

Africa

• Early results from South Africa’s election are showing a landslide victory from Jacob Zuma’s ANC. 
• The U.N. special envoy in Niger was freed by al Qaeda’s North African wing.
• The French Navy turned 11 piracy suspects over to Kenya for prosecution.

Asia

• More than 100,000 people have fled the fighting in northern Sri Lanka. Military operations are continuing.
• Pakistan has sent troops to protect government buildings in an area infiltrated by the Taliban.
• After the second of five rounds of voting in India’s parliamentary elections, polls show neither the ruling Congress Party nor the opposition BJP with enough votes to rule on their own.

Middle East

• A suicide bombing killed 22 people who were collecting humanitarian aid in Baghdad.
• Lebanon’s election this summer may be its most corrupt ever, with money flowing in from abroad to help buy votes.
• The Egyptian government has invited Israeli Prime Minister Benjamin Netanyahu for a visit.

Europe and Caucasus

• U.S. and Russian negotiators will begin talks on a new nuclear arms reduction treaty on Friday. 
• Turkey and Armenia agreed on a framework for normalizing relations.
• Gunfire was reported on the Georgia-Ossetia border.

Americas

• The U.S. Congress is debating whether to establish a panel to investigate Bus-era interrogations.
• On Earth Day, President Obama called for congress to pass a cap-and-trade bill to reduce carbon emissions.
• A Venezuelan court issued an international arrest warrant for a political opponent of Hugo Chavez who is seeking asylum in Peru.

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