IMF to cut global growth forecast

The International Monetary Fund will cut its forecast for global economic growth in a quarterly assessment later this month, IMF Managing Director Christine Lagarde said today.

She did not say which nations or regions were contributing to the lowered assessment for 2012, characterising it as "tilted to the downside" compared with the IMF's 3.5% global growth projection given three months ago.

"In the IMF's updated assessment of the world economy, to be released 10 days from now, the global growth outlook will be somewhat less than we anticipated just three months ago. And even that lower projection will depend on the right policy actions being taken," she said in a speech.

"I am not going to give any number," she told reporters during a visit to Tokyo to meet Prime Minister Yoshihiko Noda, other ministers and business leaders. "Tilted means that there is not an enormous variation, but it's a negative variation. And clearly certain regions of the world are more affected than others."

Growth in most major economies has showed signs of slowing in recent months, partly due to Europe's chronic debt crisis.

Ms Lagarde praised Mr Noda's effort to raise taxes to reduce Japan's debt burden.

She said raising the consumption tax has worked in other countries to reduce debt. Japan is about to pass legislation to double its sales tax to 10% by 2015.

Japan has one of the largest public debt burdens in the developed world but the tax proposal is highly unpopular here and has split the ruling party.

"It's certainly a very brave move," she said of Mr Noda's policy.