December 6, 2006, 7.17 am (Singapore time)
IMF trims 2007 global GDP forecast
PARIS - The IMF will trim its global growth forecast for 2007 but the outlook remains healthy for a year of 'profound change' where Europe and Asia do more for growth as the US economy weakens, a top IMF official said on Tuesday.
The IMF in September forecast 4.9 per cent growth next year after 5.1 per cent this year, both well above long-term average, and IMF First Deputy Managing Director John Lipsky said changes to the forecast would be marginal.
Speaking to a small group of reporters over lunch in Paris, he said the big event of 2007 was an expected shift towards Europe and the emerging market economies of Asia as drivers of global growth while the US economy lost some steam.
US consumption was headed for a period of slower growth than in recent years, said Mr Lipsky, while domestic consumption growth in Asia and Europe should quicken. He said it was up to policy-makers to preserve the level of stability the world had enjoyed in recent years.
'The world has become more stable, not less stable. It is my firm belief that that in part reflects the beneficial impact of globalisation and it also reflects in large part the concentration of central banks across the world on maintaining stability-oriented policies, focused on keeping inflation low.' -- REUTERS
