The International Monetary Fund cut its growth forecasts for the world economy Tuesday, warning of increasing risks from the slowdown in China, which is dragging other emerging markets down with it. The global economy will expand just 3.1 percent this year and 3.6 percent next year, the IMF predicted, revising downward its previous forecasts by 0.2 percentage points in both cases. "Six years after the world economy emerged from its broadest and deepest postwar recession, a return to robust and synchronized global expansion remains elusive," said the IMF's new chief economist, Maurice Obstfeld.
The International Monetary Fund estimated Tuesday that the US economy will pick up only modestly in 2016 after a mild gain this year, thanks to low energy prices and an improving housing market. "The recovery is expected to continue in the United States, supported by lower energy prices, reduced fiscal drag, strengthened balance sheets, and an improving housing market," the IMF said, predicting these positive factors would offset a decline in exports driven by the strong dollar. Growth beyond 2016, however, likely will slow to a lackluster 2.0 percent rate because of the aging population and weak productivity growth, the IMF said.