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But
the global financial institution said growth prospects for next
year remain undimmed, despite Greece's debt crisis and recent
volatility in Chinese financial markets.
In an update to its World Economic Outlook report, the IMF said
the global economy should expand 3.3 percent this year, 0.2
percentage point below what it predicted in April. Growth should
speed up to 3.8 percent next year, it said, unchanged from
earlier forecasts.
The IMF pinned much of the blame for the lower growth forecast
on the United States. The U.S. economy contracted in the first
quarter, hurt by unusually heavy snowfalls, a resurgent dollar
and disruptions at West Coast ports.
The IMF said it expected the U.S. economy to grow 2.5 percent
this year - it lowered the U.S. growth forecast last month from
3.1 percent in April. The IMF also said U.S. economic
sluggishness had spilled over to Canada and Mexico.
"(But) the unexpected weakness in North America ... is likely to
prove a temporary setback," the IMF wrote in the report.
The IMF also maintained its forecasts for a pickup in growth in
the euro zone, despite Greece moving ever closer to the edge of
default and an exit from the currency bloc as it races to find a
last-minute third bailout.
"Developments in Greece have, so far, not resulted in any
significant contagion," the IMF said. "Timely policy action
should help manage such risks if they were to materialize."
In developing economies, the IMF said growth had been dampened
by lower commodity prices, tighter financial conditions tied to
the economic rebalancing in China and geopolitical factors.
Chinese stock markets have tumbled by more than 30 percent over
the last month, prompting regulators to impose heavy-handed
intervention to stem the rout.
The IMF said the market crash suggests China could face greater
difficulties as it tries to move from an investment-led economic
growth model to one focused on domestic consumption.
The Fund also repeated its warning that asset price shifts and
financial market volatility could disrupt its predictions,
though it expects the economic situation in Russia and the
Middle East to calm down next year.
(Reporting by Anna Yukhananov; Editing by Paul Simao)
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