The International Monetary Fund yesterday cut its forecast for economic growth in the United States this year to 2.2 percent, the slowest expansion in five years, citing a weakening housing market.þþThe forecast for the American economy compares with a September estimate of 2.9 percent, the I.M.F. said in its twice-annual World Economic Outlook released yesterday. The United States economy grew 3.3 percent in 2006.þþHome construction has slumped as builders try to trim a glut of unsold properties that has reached a 15-year high, the I.M.F. said. Home building will remain more of a drag than an anchor as a “robust” labor market and high corporate profits stimulate a rebound in growth next year to 2.8 percent, the fund said.þþ“A growth pause still seems more likely at this stage than a recession,” the I.M.F. report said. “The expansion is expected to gradually regain momentum, with quarterly growth rates rising during the course of 2007.”þþThe fund left its forecast for global growth this year unchanged at 4.9 percent, even as it cut estimates for the United States. It would be the first time in four decades that the world economy powers ahead with little help from its biggest participant.þþThe downgrade means the United States will probably not lead the Group of Seven nations in growth for the first time since 2003, ranking fourth behind Britain, Canada and Japan, according to the I.M.F. The United States has not trailed Japan, which struggled with falling prices for much of the last decade, since 1991.þþThis year will also be the first since 2001 in which European economic growth will be faster than that in the United States, according to the I.M.F. forecast. The economy of the 13 nations using the euro will grow 2.3 percent this year, the I.M.F. estimates. The lender increased its forecast for Europe from 2 percent.þþ
Source: NY Times
