WASHINGTON (AP) — In downgrading its outlook for world economic growth in 2016, the International Monetary Fund said it foresees expansion of 3.2 percent this year, down from the 3.4 percent it forecast in January. By comparison, last year the global economy grew 3.1 percent, its slowest pace since the recession year of 2009.
Here are the IMF's forecasts for the world's major economies:
The IMF cut its outlook for U.S. growth to 2.4 percent from 2.6 percent in January. The American economy slowed sharply at the end of 2015, hampered by a strong dollar that hurt U.S. exports. Consumer spending, which accounts for about 70 percent of U.S. economic activity, has remained relatively healthy. And the American job market is strong.
The forecasters raised their outlook for China — to 6.5 percent growth this year from the 6.3 percent they expected in January. Consumer spending has remained resilient, and services industries are thriving even as manufacturers falter. But China, the world's second-biggest economy, is trying to manage a tough transition away from fast but unsustainable growth based on investment and toward slower, steadier growth built on consumer spending. The Chinese economy has been decelerating since growing 10.6 percent in 2010.
The IMF halved its forecast for Japanese growth this year — to 0.5 percent — despite aggressive monetary policy that has turned Japan's interest rates negative. Next year could be even worse when a consumption tax hike takes effect: The IMF expects the economy to shrink 0.1 percent in 2017. Japan has also been pinched by a rising yen.
The 19 countries that use the euro currency are expected to collectively expand 1.5 percent this year, down from the 1.7 percent the IMF forecast in January. Slowed by high debts and banking problems left from the financial crisis, the eurozone economy has failed to gain much momentum. Despite the European Central Bank's easy-money policies, consumers and businesses have remained wary about spending and investing.
The region has been badly hurt by China's slowdown, which has slashed demand for commodities and diminished prices of raw materials. The IMF expects the region's economy to shrink 0.5 percent this year, down from a January forecast of a 0.3 percent contraction. The region is being pulled down by Brazil. Beset by political turmoil, the Brazilian economy is expected to shrink 3.8 percent this year.
The crash in commodities prices has battered sub-Saharan Africa hard. The IMF trimmed its forecast for the region's growth to 3 percent from the 4 percent it expected in January. Hurt by low oil prices, Nigeria, a key energy producer, is expected to register just 2.3 percent growth this year, down from 2.7 percent in 2015. The South African economy is expected to eke out 0.6 percent growth.