The International Monetary Fund (IMF) has warned that the world economy is plunging “deeply into the danger zone” in the wake of the ongoing euro-zone crisis.

The IMF has forecast a growth in the global economy of just 3.25% in 2012, a 4% decrease from last year’s predictions, with the UK’s predicted growth dipping from 1.6% to 0.6%.

Shadow Chancellor Ed Balls called for the government to reconsider its rigorous cost-saving plans in view of the IMF’s predictions:

“Now the IMF has slashed their growth forecasts and confirmed that growth in Britain will indeed be much lower than they expected. And they have called on countries with low interest rates, like the UK, to reconsider the speed of their spending cuts and tax rises,” according to an official IMF statement.

Although the growth of Euro-zone countries such as France and Germany will be more adversely affected, with growth of 0.2% and 0.3% respectively in 2012, the EU as a whole will only have to face a “mild recession” in 2012. Euro-zone GDP is set to decrease by just 0.5%.

With several world markets teetering on financial disaster, the IMF has called for a “decisive and consistent policy action” to redress the current financial crisis.

“There are three requirements for a more resilient recovery: sustained but gradual adjustment, ample liquidity and easy monetary policy, mainly in advanced economies, and restored confidence in policymakers’ ability to act.”

At its worst, the reverberations of the euro-zone crisis  may reach as far as the US according to an update of the IMF’s September report, which warned that the “United States and other advanced economies are susceptible to spillovers from a potential intensification of the euro-zone crisis”.

Transfer Money to Europe

If you are looking to invest in Europe, think carefully about how you will be transferring money to Europe. Foreign currency exchange rates quoted by banks are almost always worse than the exchange rates available through specialist currency dealers.

So if you are looking to send money to Europe – which you will inevitably have to do if you are looking to make a property investment, be sure to compare the market before you buy your overseas currency.