IMF trims its growth forecasts

THE International Monetary Fund has cut its global growth forecasts, warned of disorderly currency movements and predicted deflation in Germany.

A leaked report from the organisation sees the global economy growing by 3.1% this year rather than the 3.2% it predicted in the spring. Its US growth forecast for this year is unchanged at 2.2% but it has slashed its Europe prediction.

A draft copy, obtained by Reuters, of the IMF's World Economic Outlook due to be unveiled at the IMF/World Bank annual meetings next month says the global recovery will gather speed in the second half of this year, with growth reaching 4% in 2004.

But it said America's huge current account deficit could cause wild currency swings and Germany faces a mild decline in prices. The key forecasts are:

Global growth 3.1% in 2003, 4% in 2004.

US growth 2.2% in 2003, 3.6% in 2004.

Eurozone growth 0.7% in 2003, 1.9% in 2004.

Japan growth 1.1% in 2003, 0.8% in 2004.