IMF lowers its global economic prospects

The International Monetary Fund says the global economy is expanding slower than it expected and has trimmed its projections for this year and next.

The Washington-based agency said Tuesday it now is predicting global growth of 3.1 percent this year and 3.8 percent in 2014. Both figures are down two-tenths of one percent from IMF’s April predictions.

In its quarterly review of the world economy, the IMF said its declining forecasts stem from “continuing growth disappointments” in such developing countries as China and Brazil, a deeper recession in Europe’s 17-nation euro currency bloc and a slower advance in the United States than expected. By contrast, the IMF said Japanese growth has been more robust than first thought.

The IMF said it expects that the world’s economic conditions to improve, “but only gradually.” It said new “financial market volatility” has hit emerging markets the hardest, with rising interest rates and depreciating currencies.

The agency said that the world’s major economies, such as the U.S., with the biggest global economy, need to promote policies for near-term growth while also cutting long-term debt. IMF chief Christine Lagarde has criticized the U.S. for cutting government spending too much too fast.