The International Monetary Fund (IMF) is warning that a credit crisis gripping international financial markets could affect Caribbean and other countries. The effects of financial turbulence caused by losses in one area of the US mortgage market has so far mostly affected the United States and Europe. However the IMF says this effect will more than likely be protracted and could slow down the growth of the global economy. It is also warning Caribbean and other developing countries especially those that have experienced rapid credit growth in recent years that they too could be affected. In its latest financial stability report, the IMF which supervises the global financial system, said the potential consequences of this episode should not be underestimated and the adjustment process is likely to take a long time. The US economy responsible for a third of global output faces several risks including higher interest rates on mortgage borrowing and falling stock prices which could dampen spending as Americans feel the need to save more. For the Caribbean this could have a knock on effect for the vital tourist industry. Most of the region's tourist comes from the United States and with planning well underway for the peak winter season which starts early December, this warrants their attention. Tighter financial constraints and economic conditions in the US could very well result in fewer American tourists coming to the region. This could further complicate things for the Caribbean as earlier this year the IMF said that while the regions hosting of the Cricket World Cup has been a boon to the economy, the party may end in debt and a fiscal hangover. Reprinted from radioja.com