The International Monetary Fund trimmed its global growth forecast for the fifth time since early last year due to a slowdown in emerging economies and the woes in recession-struck Europe. In its mid-year health check of the world economy, IMF also warned global growth could slow further if the pull-back from massive monetary stimulus in the United States triggers reversals in capital flows and crimps growth in developing countries.
Ratings agency Fitch added to Italy's mounting problems this week by cutting its credit rating due to the political uncertainty after last week's election, deep recession and rising debt. Fitch lowered Italy's sovereign rating by one notch to BBB plus, with a negative outlook, raising the risk that its next ratings change will be a further downgrade.
World stock markets and southern European government bonds sank on Tuesday on fears that political stalemate in Italy would leave its economic reforms in tatters and reignite the Euro zone's broader debt crisis.
European leaders agreed on Friday to press on with further steps to tackle their debt crisis but German Chancellor Angela Merkel threw out a proposal to boost risk-sharing with a fund to help Euro zone states in trouble.
An agreement among Greece's international creditors on reducing its large debt pile should be rooted in reality and not in wishful thinking, the head of the International Monetary Fund said ahead of a tense meeting with European leaders.
India and Brazil have the highest government debt ratios at almost 70% of GDP among top ten emerging market economies, according to a report by Deutsche Bank.
Protesters clashed with police in Spain's capital as the government prepares a new round of unpopular austerity measures for the 2013 budget that will be announced on Thursday.
Managing Director Christine Lagarde of the International Monetary Fund (IMF) showed strong support of the European Central Bank's new framework for intervention in the Euro zone debt crisis, deeming Thursday’s action 'an important step toward strengthening stability and growth.'
Asian shares looked set for their biggest daily gain in nearly five weeks on Friday after the European Central Bank outlined its bond-buying scheme to help calm the Euro zone's debt crisis, while firm US data fed speculation of a strong jobs report later in the day.
Spain’s recession worsened in the second quarter as the government’s austerity push to reduce the Euro area’s third-biggest budget deficit and a slump in consumer spending offset growth in exports.