IMF cuts global economic growth forecasts on plunging oil prices and rising US dollar

TORONTO - The International Monetary Fund (IMF) has lowered its 2015 forecast for global economic growth, citing the impact of falling oil prices and a rising US dollar, the Toronto Star reported.

While the global economy is still expected to perform better in 2015 than in 2014, the agency has cut its growth forecast since its last World Economic Outlook in October.

The agency now believes the global economy will grow 3.5 per cent in 2015. That's 0.3 percentage points higher than in 2014, but also 0.3 percentage points lower than its October forecast of 3.8 per cent.

For 2016, the IMF has also revised its forecast downward to 3.7 per cent.

"The world economy is facing strong and complex cross-currents," Mr Olivier Blanchard, IMF director of research, said in remarks prepared for a speech in Beijing.

While some economies are benefitting from lower oil, others are suffering, he noted.

Since June last year, the price of a barrel of oil has more than halved to less than US$50, from about US$100, largely due to OPEC's decision to maintain supply despite weakening global demand, the IMF noted.

At the same time, the US dollar has risen 7 per cent since August, while the euro has fallen by 3 per cent and the yen by 10 per cent, the IMF said.