Optimistic Outlook

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The International Monetary Fund has announced its global economic outlook. It’s a relatively optimistic outlook for South Korea's economy; the IMF says it predicts growth of about three percent. By contrast, its forecast for the U.S. economy is rather pessimistic. Here’s more.

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The International Monetary Fund projected that the South Korean economy will grow 2.7 percent this year and 3 percent next year. The outlook remains unchanged from an earlier projection made in April. The IMF's forecast is somewhat optimistic compared to the predictions of Korean groups, which have predicted that the domestic economy's growth rate will remain in the two percent range for the third straight year. Although the Korean government is spending additional funds, the IMF has advised that Korea maintain its expansionary fiscal and monetary policies while simultaneously restructuring to maximize economic growth potential. Meanwhile, the IMF has slashed economic outlooks for most of the advanced nations, including the U.S. The U.S. economy is predicted to grow 1.6 percent this year and 2.2 percent next year. The latest forecast is significantly lower than three months ago. The IMF cited sluggish investments by American businesses and the strong U.S. currency as reasons behind its outlook. The forecast will likely affect the U.S. Federal Reserve's plan to raise interest rates within the year. The IMF expressed particular concerns that the issue of trade protectionism raised in the U.S. presidential race could hamper global economic recovery.

[Soundbite] Maurice Obstfeld(Economic Counselor, IMF)

Overall, the IMF has laid out a cloudy prospect for advanced economies and a relatively optimistic outlook for emerging ones.