PARIS, April 9 - The International Monetary Fund is to cut its 2003 global economic growth forecast to 3.2 percent and sees serious risks to growth if the Iraq war is prolonged, an IMF source told s on Wednesday. The source said the relatively robust growth forecast, due to be published in the IMF's World Economic Outlook at 1500 GMT, was based on the assumption of oil prices averaging $31 per barrel and dynamic growth in Asia and transition countries.
In the IMF last outlook published last September, it had predicted global growth of 3.7 percent. "The IMF warns about the serious economic consequences if the war in Iraq lasts much longer," the source said. The source said the IMF would also shave its U.S. growth outlook for this year to 2.2 percent from 2.6 percent. It said risks to growth were posed by the country's budget deficit, which could exceed five percent of GDP if the war continues for longer, as well as a slump in stock markets and the high current account deficit. The IMF would cut its euro zone growth forecast to 1.1 percent from 2.3 percent, as economic conditions in the single currency area sink to a six-year low, the source said, with German GDP growth seen at 0.5 percent, down from last September's forecast of 2.0 percent.//