IMF revises growth figures upward, warns of inflation

July 17th, 2008 - 11:43 pm ICT by IANS  

Washington, July 17 (DPA) The International Monetary Fund (IMF) Thursday revised upward its predictions for world economic growth for the remainder of the year, despite a slowdown that is expected to continue into 2009 and mounting inflation concerns. Growth is predicted to be 4.1 percent in 2008 down from five percent in 2007, with growth continuing to slow to 3.9 percent in 2009, the IMF’s World Economic Outlook released in Washington Thursday said.

The slowdown would be less severe than the IMF predicted in April on greater than anticipated demand in the first half of the year, revising world growth up 0.4 percent from the earlier projection.

It revised growth in advanced economies upward 0.4 percent to 1.7 percent and increased its forecast for emerging and developing economies by 0.2 percent to 6.9 percent growth.

In the US, where economic woes have dominated headlines for months, the IMF said growth would be 0.8 percent more than the earlier projection to 1.3 percent for 2008.

Developing Asian nations will see growth of 8.4 percent for the year, after a revision of 0.2 percent, down from 10 percent growth in 2007, the IMF predicted.

In China, the IMF projected 9.7 percent growth, down from 11.9 percent last year, and in India, eight percent growth was forecast, down from 9.3 percent in 2007.

In the Euro Zone, growth was revised upward 0.3 percent to 1.7 percent for the year. Japan will see growth of 1.5 percent for the year, up 0.3 percent from the earlier prediction, and down from 2.1 percent growth in 2007.

Rising inflation driven by food and fuel prices - especially in developing countries - is of growing concern to the IMF and will complicate policy decisions designed to promote growth, it said.

Headline inflation rose 3.5 percent in May over the year-earlier period in advanced economies, and 8.6 percent in emerging and developing economies, where food and fuel make up a larger share of spending.

The IMF rose its inflation forecast for emerging economies to 9.1 percent for 2008, and 7.4 percent in 2009.

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