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IMF Trims Its Global Growth Forecast

STEVE INSKEEP, HOST:

The International Monetary Fund has trimmed its forecast for global growth.

NPR's John Ydstie reports the outlook was adjusted downward, largely because so much of Europe is still in recession.

JOHN YDSTIE, BYLINE: The IMF projects the Euro area economy will shrink three-tenths of a percent this year, but return to positive growth next year.

Meanwhile, the IMF forecast, called the World Economic Outlook, predicts the U.S. will grow just under two percent this year and around three percent in 2014.

U.S. growth is somewhat slower than expected, due to the drag from the immediate budget cuts under the sequester.

Even with that added drag, the U.S. is performing better than most other large advanced economies, but the IMF's top economist, Olivier Blanchard, says risks remain.

OLIVIER BLANCHARD: Recent good news about the U.S. has come with renewed worries about the euro area. Given the strong interconnections between countries, an uneven recovery is also a dangerous one.

YDSTIE: Growth prospects for one advanced economy - Japan - are looking better after a huge dose of stimulus from the government and the central bank in recent weeks.

Also, on the plus side, the emerging economies of China, India and Brazil are doing well - with higher growth rates than in 2012.

Overall, the IMF predicts the world economy will expand at a 3.3 percent annual rate this year, slightly faster than it did last year.

John Ydstie, NPR News, Washington. Transcript provided by NPR, Copyright NPR.

John Ydstie has covered the economy, Wall Street, and the Federal Reserve at NPR for nearly three decades. Over the years, NPR has also employed Ydstie's reporting skills to cover major stories like the aftermath of Sept. 11, Hurricane Katrina, the Jack Abramoff lobbying scandal, and the implementation of the Affordable Care Act. He was a lead reporter in NPR's coverage of the global financial crisis and the Great Recession, as well as the network's coverage of President Trump's economic policies. Ydstie has also been a guest host on the NPR news programs Morning Edition, All Things Considered, and Weekend Edition. Ydstie stepped back from full-time reporting in late 2018, but plans to continue to contribute to NPR through part-time assignments and work on special projects.