IMF slashes US growth forecast to 2.5%

The International Monetary Fund has cut its forecast for US growth after unexpected economic weakness and European woes.

The IMF reduced its US growth forecast for 2011 to 2.5%, down from the 2.8% forecast in April, on fears the country will be hit by the European sovereign crisis and by a slowdown in global activity in Q2, Bloomberg reports. "Greater-than-anticipated weakness in U.S. activity and renewed financial volatility from concerns about the depth of fiscal challenges in the euro area periphery pose greater downside risks," the IMF said today. Commodity price rises and a stagnant housing market are also battering the US, prompting the IMF to slash next year's forecast as well. It predicted th...