[070615] IMF Cuts US Economic Growth Forecast to 2.5pc From April's 3.1pc

THE International Monetary Fund (IMF) has downgraded its forecast for United States economic growth in 2015 to 2.5 per cent from its most recent prediction of 3.1 per cent in April.

News came when the IMF released its annual review of the US economy, in which it also recommended the American central bank, the Federal Reserve postpone raising rates until the first half of 2016.

"The outlook by the IMF of the US economy is rather positive, yet we have revised downward our forecast for 2015," said IMF managing director Christine Lagarde in an interview on National Public Radio's "Morning Edition".

Ms Lagarde said harsh winter weather, west coast port congestion, plunging investment in the oil and energy sector, and a strong dollar all contributed to the decision to downgrade the forecast.

The Wall Street Journal also reported that American productivity fell 3.1 per cent in first quarter. Worker productivity fell in the opening months of 2015, underscoring an economic soft patch marked by weak business investment and tepid wage gains.

A gauge of compensation costs, unit labour costs, increased at a 6.7 per cent annual rate in the first three months of the year. The figure was revised up from an earlier estimate of 5 per cent.

Source : HKSG.