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IMF is latest to reduce US growth forecast

IMF is latest to reduce US growth forecast
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The International Monetary Fund has cut its growth forecast for the United States for this year from what it said a month ago.

It cited economic weakness in the early part of the year as the reason for trimming its prediction from 2.0 percent to 1.7 percent.

US GDP contracted at a 2.9 percent annual pace between January and March according to revised figures

It was dragged down by a weak housing market, a slower pace of restocking by businesses and lower exports. It was the sharpest decline in five years.

Officials at the Federal Reserve have also lowered their forecasts for US growth.

They too acknowledged weakness at the beginning of the year but called it an “aberration”.

In the longer term, the IMF also warned as the US population ages, the economy will not be able to grow above two percent in the longer-term without significant reforms including tax and immigration changes, more investment in infrastructure and job training.

It also said there would need to be greater provision of childcare assistance,to help lure more Americans into the workforce.