IMF Predicts Slower U.S. Growth But Strong Global Outloook

Oct. 18, 2006
U.S. economy growth predicted at 2.7% or 2.8%.

The IMF chief economist on Oct. 18 predicted slower than expected growth next year in the U.S., with a "dramatic" slowdown in the housing market, but said global momentum remained "very strong." All in all, there is a big uncertainty" regarding the economic outlook in the U.S., said Raghuram Rajan, adding that he expected growth in the American economy in 2007 to be at 2.7% or 2.8%."

The International Monetary Fund said last month in its twice-yearly World Economic Outlook report that U.S. growth would reach 3.4 % this year before easing to 2.9% in 2007. The extent of the slowing of the U.S. economy is one of the major risks for the global outlook, he said, because the country is such a big part of the world economy.

But "our basic view is that the global growth is very strong and expected to be very strong coming into next year," he said. "Japan is in progress, emerging economies are growing very strongly," said Rajan, adding that the recent decline of oil prices was helpful for the global outlook.

Copyright Agence France-Presse, 2006

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