17 December 2001, 12:21  IMF to cut 2002 euro zone growth forecast to 1.2 pct from 1.3 - report

FRANKFURT (AFX) - The International Monetary Fund is revising downward its forecast for euro zone growth to 1.2 pct next year and to 1.5 pct this year, Handelsblatt said, citing sources based in Washington. The IMF is scheduled to announce its revisions tomorrow, it said. The new forecasts are each 0.1 percentage points less than those the fund announced in November. The newspaper said the IMF expects German growth to be 0.5 pct this year, down 0.2 percentage points from the previous forecast, and 0.7 pct next year, down 0.1 percentage points. For the UK, Italy and Canada, the IMF is keeping its forecasts unchanged, it added. The IMF is also revising downward its US growth forecast to 1.0 pct this year and, for 2002, it is maintaining its existing 0.7 pct forecast. The IMF is revising upward its forecast for Japan, but the fund still anticipates that the country will remain in recession. For 2001, it expects Japan's GDP to fall 0.4 pct and to fall 1.0 pct in 2002.

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