IMF lowers US growth estimate, holds global target

Washington, Nov 3: The International Monetary Fund now thinks the US economy will slow to about 2.5 per cent in 2007, from a September estimate of 2.9 percent, as a cooling housing market curtails residential investment and consumption spending.

In its annual economic outlook for the Western Hemisphere, which includes the United States, Canada and Latin America, the IMF on Thursday said the slowdown in the United States would be offset by higher growth in the euro area, Japan and emerging Asia.

The fund maintained its September estimate for global growth of 5 per cent for 2006 and 2007.

It said business investment in the United States would likely remain solid, especially with the retreat of oil prices.

''The risk to this forecast are mainly to the downside, particularly if there is a faster-than-expected weakening of housing activity in the next months,'' the fund said.

It said price pressures in the United States are expected to be contained, reflecting sustained productivity growth and a lower oil prices.

Reuters