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(CEP News) - The International Monetary Fund raised its global growth forecast for 2008 to 4.1% from 3.7% while growth forecast for 2009 is 3.9%. The IMF report forecasts growth for six of the Group of Seven industrial nations, with Canada's being downgraded.
The U.S. growth forecast is for the American economy to grow 1.3% in 2008, while a more modest pace of 0.8% in 2009 is expected. The euro zone growth forecast for 2008 has been elevated to 1.7% from 1.4%, while 2009 is forecast to hit 1.2%. The outlook for Canada is that growth will slow to 1% in 2008, and pick up to 1.9% in 2009. The IMF outlook report called for tighter monetary policy and fiscal restraint for emerging markets. The report predicts growth in emerging and developing economies to lose steam. "Growth in these economies is projected to ease to around 7 percent in 2008-09, from 8 percent in 2007. In China, growth is now projected to moderate from near 12 percent in 2007 to around 10 percent in 2008-09,'' the IMF report said. The report predicts that rising inflation will begin to impact growth as rising commodity prices begin to place pressure on prices. The IMF report said that inflation in advanced countries would average 3.4% in 2008. By Steve Stecyk,
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, edited by Cristina Markham,
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