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The International Monetary Fund (IMF) released its World Economic Outlook on Tuesday. The IMF lowered its global economic growth forecasts due to a modest recovery in advanced economies and the slowdown in emerging economies.
The global economy will expand 3.2% in 2016, down from the previous forecast of 3.4%, and 3.5% in 2017, down from the previous forecast of 3.6%, according to the IMF.
"Lower growth means less room for error. Persistent slow growth has scarring effects that themselves reduce potential output and with it, demand and investment," Maurice Obstfeld, the IMF Economic Counsellor and Director of the Research Department, said.
The IMF said in its report that main risks to the outlook are financial risks, geopolitical shocks and political discord.
The IMF cut its growth forecasts in advanced economies to 1.9% in 2016, down from the previous estimate of 2.1%, and to 2.0% in 2017, down from 2.1%, while emerging markets expected to expand 4.1% in 2016, down from 4.5%, and 4.6% in 2017, down from 4.7%.
The lender downgraded its growth forecast for the Eurozone for 2016 to 1.5% from 1.7% and for 2017 to 1.6% from 1.7%.
The U.S. economy is expected to grow 2.4% in 2016, down from the January forecast of 2.6%, and 2.5% in 2017, down from the previous forecast of 2.6%.
China's economy is expected to expand 6.5% in 2016, up from the previous forecast of 6.3%, and 6.2% in 2017, up from the previous forecast of 6.0%, while India's economy is expected to grow 7.5% in 2016 and in 2017, unchanged from the previous estimates.
UK's GDP is expected to rise 1.9% in 2016, down from the previous forecast of 2.2%, and 2.2% in 2017, unchanged from the previous estimate.
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