IMF Lowers Global Growth Estimates in Semi-Annual Report

The International Monetary Fund expects the global economy to contract 1.3% in 2009, a downward revision from the previous forecast calling for a contraction of between 0.5% and 1.0%, according to the Fund's semi-annual report.

The Fund also said that in 2010 the global economy should grow 1.9% versus a previous forecast for 3% growth. All G7 nations are expected to contract in 2009, with the U.S. economy shrinking 2.8% in 2009 and zero growth in 2010.

The Japanese economy is expected to contract 6.2% in 2009 and grow 0.5% in 2010, the euro zone economy is forecast to shrink 4.2% in 2009 and 0.4% in 2010, the Canadian economy is expected to fall 2.5% in 2009 and grow 1.2% the following year, and the UK economy is expected to decline 4.1% in 2009 and 0.4% in 2010.

U.S. House Prices Climb Unexpectedly in February

U.S. house prices unexpectedly rose in February, according to a report from the Federal Housing Finance Agency on Wednesday.

The report showed a 0.7% month-over-month increase in U.S. house prices, following a downwardly revised 1.0% increase in January. Economists were expecting a 0.7% drop.

The largest increase was in the Pacific region, up by 3.8%, and the West South Central region, with prices climbing 1.9% month-over-month. In the West North Central region, home prices were up 1.5% and the New England area saw a 2.2% jump in prices.

U.S. Energy Inventories Continue to Climb

U.S. weekly oil supplies rose to a fresh 19-year high, and gasoline and distillate supplies unexpectedly rose, inventory data revealed.

Crude oil inventories increased 3857k compared to the +2500k consensus, the U.S. Energy Information Administration (EIA) said. It was the seventh consecutive weekly build and brings total U.S. inventories to 6.0 million barrels - the highest level since 1990.

Gasoline supplies increased 802k barrels compared to the -700k consensus estimate. Distillate supply increased by 2685k compared to expectations of a 1000k drawdown. The data was for the reference week April 17.

Refinery utilization unexpectedly climbed 3.07 percentage points -- the largest one-week rise since December 2008 and refineries are operating at 83.4% of capacity, the EIA said.

Treasury Secretary Geithner Says World Needs U.S. to Recover

U.S. Treasury Secretary Timothy Geithner said Wednesday that the U.S. bears most of the responsibility for causing the financial crisis, and that the country's economy needs to recover in order for the rest of the global economy to bounce back.

Speaking to the Economic Club of Washington, D.C., Geithner said the International Monetary Fund is forecasting that world growth will contract 1.3% in 2009.

As for the U.S. response, Geithner said the fiscal stimulus plan introduced by President Barack Obama will save 3.5 million jobs and add three percentage points to GDP. The U.S. will go back to living within its means, he said.

Canada's Leading Economic Index Declines for Seventh Straight Month

Statistics Canada's composite leading indicators continued to come under pressure in March, falling 1.3% in the month. This marks the data point's seventh consecutive month of contraction. The pullback was worse than the 0.8% contraction expected by economists and follows the previous month's downwardly revised 1.4% decline.

According to Statistics Canada, nine out of 10 subcomponents experienced contraction, including a 4.3% decline in the housing component, a 2.3% fall in equities and a 10.3% pullback in new orders.

Canada Will Push for Stricter Regulation, More Stimulus at G7 and G20

Canada will set the example for other countries at the upcoming G7 and G20 meeting in Washington, D.C. on Friday, according to a senior Finance Ministry official.

The official said the main message from Canada will be that there is still a lot of work to do, including maintaining stimulus spending and improving financial regulation.

"Canada is well positioned to offer guidance as to how the reforms will proceed," the official said.

Once the recession is over, the official said the global financial system will see stricter capital requirements for banks, limitations on leverage, and a requirement that hedge funds be registered.

UK Plans to Borrow £703 Billion Over Five Years to Fight Recession

The UK government plans to borrow a record £703 billion over the next five years - £269 billion more than in the previous budget - to continue supporting a suffering economy and counteract large job losses.

Presenting the fiscal 2009 budget on Wednesday, UK Chancellor of the Exchequer Alistair Darling said the UK economy is expected to contract 3.5% in 2009 and grow 1.25% in 2010.

In addition to previous initiatives to support the labour market, the UK is proposing to spend £1.7 billion to create jobs and provide guarantees for the unemployed over a period of 12 months. The initiative applies to persons under the age of 25 and is expected to support 250,000 jobs.

By Ernest Hoffman, This email address is being protected from spam bots, you need Javascript enabled to view it and Stephen Huebl, This email address is being protected from spam bots, you need Javascript enabled to view it , with contributions from Megan Ainscow, This email address is being protected from spam bots, you need Javascript enabled to view it , Adam Button, This email address is being protected from spam bots, you need Javascript enabled to view it and Erik Kevin Franco, This email address is being protected from spam bots, you need Javascript enabled to view it , edited by Sarah Sussman, This email address is being protected from spam bots, you need Javascript enabled to view it

CEP Newswires - CEP News © 2009. All Rights Reserved. www.economicnews.ca

The Copying, Broadcast, Republication or Redistribution of CEP News Content is Expressly Prohibited Without the Prior Written Consent of CEP News.

A copy of CEP News disclaimer can be found at http://www.economicnews.ca/cepnews/wire/disclaimer.