IMF Forecasts Global Growth 4.3% For 2005

Global economic growth is set to slow to 4.3% this year, the IMF said April 13 as it expressed anxiety over high oil prices and the flagging performances of Europe and Japan. In its semi-annual World Economic Outlook report, the IMF said growth was still too reliant on demand from the U.S. and China.

The US economy will grow by a solid 3.6% this year but faces serious financial headaches further ahead, according to the report. The IMF slashed its 2005 growth forecast for the eurozone to 1.6% from 2.2%, warning that a foreseen pick-up in momentum would be slower than expected in the face of high oil prices and global economic uncertainty.

Growth in Asia would slow to 7.0% in 2005 from a 7.8% in 2004. The report said the regional slowdown this year was partly due to a return to more sustainable growth levels but also reflected the moderation of the global economic expansion, slower semiconductor sales and high oil prices. China will continue to be the regional leader, with growth of 8.5% this year and 8.0% in 2006 after an expansion of 9.5% in 2004.

Copyright Agence France-Presse, 2005