IMF in Process of Cutting Global Forecast, Official Says

The International Monetary Fund will cut economic forecasts for the global economy “by a few decimal points,” a fund official said today.

“The global economy has weakened, we are shaving off our forecast for global growth by a few decimal points,” Khor Hoe Ee, an assistant director in the IMF’s Asia and Pacific Department, said on a conference call with reporters. At the same time, “we expect the global economy to recover gradually over the next year.”

The most recent IMF forecast, released in July, projected 2012 global growth of 3.5 percent. The fund cut its estimate for next year to 3.9 percent, from an April forecast of 4.1 percent.

IMF officials are due to release the new forecasts Oct. 9 amid signs growth is slowing in emerging markets that have been driving global expansion. A Chinese manufacturing survey pointed to an 11th month of contraction and Japan’s exports fell in August, supporting the case for increased stimulus in the region.

The IMF today reduced its growth forecast for South Korea to 3 percent this year from a June estimate of 3.25 percent.

Khor, also the mission chief to Korea, said the country’s forecast will probably be cut further when the global forecasts are released next month as slower demand worldwide hurts exports.

-- Editors: Kevin Costelloe, Gail DeGeorge

To contact the reporter on this story: Sandrine Rastello in Washington at srastello@bloomberg.net

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