IMF to Cut Global Growth Forecasts

By ANDREA THOMAS
October 9, 2007 8:59 a.m.
WALL STREET JOURNAL

BERLIN -- The International Monetary Fund will cut its 2008 growth outlook for all major economies in its World Economic Outlook report due next week, a person with access to the IMF report said Tuesday.

In its report, which will come after its last update in July which took place ahead of global financial market turmoil, the Washington-based fund now forecasts world economic growth of 4.8% for 2008, compared with the 5.2% forecast in July, according to the person.

The IMF also cuts its forecast for U.S. growth to 1.9% from 2.8% previously, while forecasting Canada's real gross domestic product to grow 2.3% next year, compared with 2.8% forecast previously.

The euro-zone economy is expected to grow less strongly than previously forecast, by 2.1% in 2008, compared with 2.5%.

Europe's largest economy Germany should see 2.0% growth in 2008, down from the previous 2.4% forecast. France should also see 2.0% growth next year, compared with the 2.3% predicted previously.

The IMF also forecasts China's economy will grow by 10.0% in 2008, down from the previous 10.5% forecast.