World Economy Falls With US
Nations hit hard by mortgage crisis, high fuel costs
By Drew Nelles,  Newser Staff
Posted Aug 24, 2008 4:53 AM CDT
The chairman of the Federal Reserve has rejected calls for higher interest rates to stave off inflation.   (AP Photo/Richard Drew)
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(Newser) – Gone is the hope that the global economy will stay strong as America's financial fortunes flag. The world’s largest economies are showing signs of a slowdown, the New York Times reports. Japan, Germany, France, Italy, Spain, the UK, even famously fast-growing India and China are all taking a hit. Global growth overall will slow to 4.1% from 5% last year, the International Monetary Fund predicts.

High energy prices and real estate disasters are largely to blame. As global demand for goods diminishes, the American economy is likely to slide further. Some experts say the storm is navigable, but the good days appear to be over for the near future. “We had buoyant world growth for a few years,” said one economist. “It was too hot not to cool down.”