Posted on: Tuesday, August 6, 2002

U.S. economic recovery in jeopardy, report says

By Martin Crutsinger
Associated Press

WASHINGTON — The U.S. economy is facing new risks because of recent stock market turbulence and accounting scandals, the International Monetary Fund said yesterday in issuing its annual assessment of economic conditions in the world's biggest economy.

The 184-nation international lending organization said the U.S. recovery from last year's recession should continue, but it cautioned that the risks going forward have increased given the huge drop in the stock market that occurred in July and new uncertainties in the minds of investors caused by corporate accounting scandals.

"While the outlook is still broadly favorable, the downside risks have intensified," the IMF said in its report, issued as Wall Street took another beating. The Dow Jones industrial average suffered its third straight triple-digit loss yesterday.

The IMF urged U.S. policy-makers to consider rolling back some planned tax cuts in an effort to keep budget deficits under control.