IMF: World Economic Outlook ‘Not Reassuring’

Posted June 17th, 2011 at 4:00 pm (UTC-5)
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The International Monetary Fund says recent trends in the world's major economies are “not reassuring,” and it warns there is a growing chance the global economy could stumble.

The IMF's World Economic Outlook, released Friday, says the global economy expanded at a rate of 4.3 percent for the first three months of the year. But it points to recent weaknesses in the United States and other advanced economies, predicting the U.S. economy will grow only 2.5 percent this year and 2.7 percent in 2012.

The IMF had previously forecast the U.S. economy to grow at a 2.8 percent pace this year.

The IMF says global inflation picked up from 3.5 percent in the last three months of 2010 to 4 percent in the first quarter of this year — an increase twice as high as was predicted in the most recent World Economic Outlook in April.

Separately Friday, a private research group suggested the U.S. economy will pull out of its recent slowdown in the coming months but warned any economic growth would likely be uneven.

In a new report, the New York-based Conference Board said its index of top economic indicators rose eight-tenths of a percent in May after declining slightly in April.

The board said it expects the U.S. economy to benefit from lower gasoline prices and from a greater availability of parts and supplies, as Japan recovers from its devastating earthquake and tsunami earlier this year.

Optimism about the future of the U.S. economy is not spreading among consumers. A survey released Friday by the University of Michigan found consumer sentiment fell in June, with many Americans saying they do not believe the recession is over.