Christine Lagarde (L), Managing Director, IMF; Alan Auerbach (2nd R), Robert D. Burch Professor of Economics and Law, University of California, Berkeley; Maria Kiwanuka (3rd L), Minister of Finance, Uganda; Fernando Aportela Rodriguez (3rd R), Minister of Finance, Mexico; Pravin Jamnadas Gordhan (2nd L), Minister of Finance, South Africa and moderator: Tom Keene (R), Editor-at-Large, Bloomberg Television and Radio on October 9, 2013 at the IMF Headquarters in Washington, DC.  - 

This week the International Monetary Fund cut its forecast for global growth to 2.9 percent for 2013. This comes as central bankers, finance ministers, and development pros from around the world are gathering in Washington for the annual meeting of the World Bank and IMF. They know there’s one thing looming large above the global economy.

You guessed it. It’s the debt ceiling.

It’s a big black cloud that’s hanging over everyone,” says Jan Randolph, director of sovereign risk at IHS Global Insight.

The risk of a U.S. default is what he calls a “low probability, high impact risk.”

It’s a bit like the risk of the Eurozone collapse last year,” he says. “Or nuclear Armageddon during the Cold War.”

In this case, it’s the risk of another contagious recession in the world’s biggest economy.

Ken Rogoff is a Harvard economist speaking at today’s meeting. He says some of these visiting officials are used to deflecting criticism at these meetings. So for them it’s kind of a relief to be in Washington and find the coverage has changed.

“They’re so happy that they don’t see complaints about Europe,” he says, “They don’t see criticisms of what’s going on in China. That everything’s focused on the U.S.”

Of course, that’s with the assumption that there will be an eleventh hour deal to avert the looming crisis.