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IMF Upbeat on Global Economic Growth Despite US Slowdown


The International Monetary Fund Wednesday issued its semi-annual World Economic Outlook predicting nearly five percent growth this year and next. VOA's Barry Wood has more.

IMF chief economist Simon Johnson says things look very good for the world economy. The IMF's World Economic Outlook says that, paced by strong growth in China and India and recoveries in Japan and Europe, global output has not been adversely affected by the deceleration of growth in the United States, the world's largest economy.

Johnson says U.S. growth is expected to slow to 2.2 percent this year before rebounding to nearly three percent in 2008. He says U.S. growth is down mainly because of weakness in the housing sector, but adds the U.S. economy remains strong in other areas.

"Thus far, the U.S. housing market's [weakness] broader impact on the economy has been contained as resilient consumption remains supported by solid income and jobs growth," Johnson says. "Household finances are solid and financial obligations for both renters and homeowners look manageable."

The IMF does not foresee recession in any of the major economies.

The British-born Johnson recently assumed the top forecasting job at the fund, having taken leave from his professorship at Massachusetts Institute of Technology. Though he acknowledges there are risks to the world economy, Johnson says there are factors indicating the pace of global growth can probably be sustained for several years.

"This growth is more balanced [among regions] than some of the rapid growth [periods] we've seen before," Johnson says. "Everyone around the world is sharing in this prosperity. I think that is a very important point to emphasize."

The IMF says there has been an impressive pick up in economic growth in sub-Saharan Africa, where output is expected to expand by nearly seven percent this year. Growth in Latin America is projected to slow to under five percent. Russia will grow by over six percent, China by 10 percent and India by 8.5 percent.

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