The International Monetary Fund says the U.S. economy is poised for a gradual, if sluggish, recovery.
IMF issued its revised forecast Friday, predicting flat economic growth
for the U.S. this year, and two percent growth in 2009.
April, the Fund's economists had predicted the U.S. economy would
contract slightly and warned the U.S. credit crisis was threatening to
cause a global recession. But Friday's report said the U.S. slowdown
had been "less than feared."
The IMF praised the Federal
Reserve's handling of the financial crisis and urged the U.S. central
bank to keep interest rates low. However, the IMF also said the
Federal Reserve may need to act quickly and raise interest rates to counter the threat of inflation.
An IMF official, First
Deputy Managing Director John Lipsky, also said the U.S. may face
further fallout from rising fuel and commodity prices.
Some information for this report was provided by AFP, Bloomberg and Reuters.