IMF: Risks to global economy are growing

A failure by Congress to raise the nation's borrowing limit "could severely damage the global economy," the International Monetary Fund said Tuesday as it trimmed its global economic forecast due to slowing growth in emerging markets.

If Congress doesn't increase the nation's borrowing authority this month, "it would probably lead to a lot of financial turmoil," IMF chief economist Olivier Blanchard said at the annual meeting of the IMF and World Bank. "It would be an issue for all credit markets, including China."

Blanchard added that the current federal government shutdown — resulting from a separate standoff over funding the government — would hurt the U.S. economy and, in turn, the global economy, only if it persisted for several weeks.

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