The International Monetary Fund has lowered its forecasts for economic growth in the U.S. and Japan, a German government official said in Berlin.
Medium-term deficit reduction strategies in the U.S. and Japan lack credibility, the IMF said in its World Economic Outlook, the German official said on condition of anonymity because the report will be published in Washington later today.
The U.S. economy grew 2.9 percent last year, the most since 2005, according to figures from the Commerce Department. The German official didn’t give an IMF forecast for growth.
While the likelihood of a double-dip economic slump in the world economy has decreased, risks to economic growth outweigh chances and commodity price shocks, especially oil, have emerged as a new risk to the global economy’s expansion, the German official cited the IMF as saying. The IMF left its forecast for global growth unchanged, he said, without giving time-frames.
The IMF estimates damage from an earthquake and a tsunami that struck Japan a month ago to amount to between 3 percent and 5 percent of the nation’s gross domestic product, the German official said.
The IMF raised its growth forecasts for Germany for this year and next, noting improved economic growth dynamism and progress in cutting the deficit as well as lowering unemployment, the German official said.
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