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Wednesday, 29 August, 2001, 05:05 GMT 06:05 UK
IMF to cut global forecasts
IMF headquarters in Washington
IMF reportedly believes the outlook for 2002 will be tough
The IMF has cut its forecast for world economic growth this year to 2.8% from 3.2%, Reuters reported on Wednesday citing unnamed sources at the international lender.

On Tuesday, Italian news agency ANSA reported the IMF's World Economic Outlook would predict 3.6% global growth in 2002.

The agency said the forecast was included in a draft copy of the WEO to be officially released late next month.

But IMF sources said the figures were taken from a July draft which had already been revised lower, Reuters said.

Analysts expect revised US growth figures due on Wednesday to be lowered from 0.7% to give an annualized growth rate of zero.

The WEO, which measures economies around the world, is constantly revised before the data is released.

Down, down, down

US growth is expected to be 1.5% this year, unchanged from the previous estimate made in the April WEO, ANSA said quoting the draft report. The IMF forecasts 2.5% growth for the US next year.

Reuters said its sources indicated the final WEO prediction of US growth in 2002 growth would fall somewhere between 1.1% and 2.5%.

Japan's economy is seen expanding just 0.2% this year and 0.5% in 2002, while eurozone growth is revised down to 2% this year, down from 2.4% in April, ANSA said.

"In the eurozone, it was right to cut interest rates in May and there is scope for more cuts once there is clear evidence of a fall in inflation or if more signs emerge of growth weakening," ANSA quoted the IMF draft report as saying.

See also:

08 Aug 01 | Business
Bank predicts slower UK growth
17 Aug 01 | Business
US trade gap widens
23 Aug 01 | Business
Japan's economic gloom deepens
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