Morgan Stanley cuts global growth forecast for the year

MORGAN Stanley cut its forecast for global growth this year, citing an insufficient policy response to Europe’s sovereign debt crisis, weakened confidence and the prospect of fiscal tightening.

The bank estimates expansion of 3.9%, down from a previous forecast of 4.2%.

The threat to the global economy from the debt burdens of developed nations from the US to Europe has caused turmoil on the world markets this month and wiped trillions of dollars off the value of equities.