U.S. a Rare Bright Spot in IMF's Gloomy Growth Outlook

2014-09-25T132828Z_1755667957_GM1E9BJ0QWI01_RTRMADP_3_USA-ECONOMY-EMPLOYMENT
Charmaine Lam, right, from the company American Income talks to job seeker Brittany Johnson, 28, at a job fair in Los Angeles, California, on November 18, 2013. Lucy Nicholson/Reuters/Files

The International Monetary Fund (IMF) upgraded U.S. growth figures in its annual World Economic Outlook published Tuesday, but had a relatively gloomy outlook for the rest of the world, revising its overall growth forecast downwards for this year and the next.

The IMF gave the U.S. an upgrade in its growth forecast to 2.2 percent growth in 2014 from 0.5 percent growth with the American economy appearing to have bounced back from a "temporary setback" in the first few months of the year, some of which was caused by bad weather, the BBC reports.

The growth in U.S. job numbers has been "strong"—the latest job figures from October 3 saw unemployment drop to 5.9 percent, with 248,000 jobs added in September—and the housing market is "recovering," according to the IMF.

Sub-Saharan Africa is expected to continue to see strong growth, although the numbers vary between countries. The IMF warned that the Ebola crisis, already having an "acute impact" on the economies of the three countries hardest hit by the virus—Guinea, Sierra Leone and Liberia—could have "dramatic consequences" for economic activity in the West African region if not contained.

Growth in Italy is also expected to surge from -0.2 percent this year to 0.8 percent in 2015.

Not all countries are faring as well as the U.S., and the IMF has warned global growth will be "weak and uneven" for the rest of the year and throughout 2015. Many countries are still suffering from the shattering effects of the 2008 economic crisis.

The organization revised its overall growth forecast for the rest of the year from 3.3 percent, down from 3.4 percent in July and predicts global growth for next year at 3.8 percent, down from an earlier prediction of 4 percent.

Japan saw the largest downgrade with a growth forecast of only 0.9 percent in 2014, while disappointing growth in the Eurozone has been impacted by "lingering frailties" in the region, according to the IMF. The organization added that several emerging markets are "also adjusting to lower potential growth."

The IMF also cut its forecast for Brazil, Latin America's largest economy, to 1.4 percent in 2015 from 2.5 percent in 2013. The economy's slow growth has been at the center of presidential campaigns and will be on voters' minds when they choose between incumbent Dilma Rousseff and pro-business candidate Aecio Neves in a presidential runoff later this month.

"In advanced economies, the legacies of the pre-crisis boom and the subsequent recession, notably high debt burdens and unemployment, still cast a shadow on the recovery, and low potential growth ahead is a concern," Olivier Blanchard, economic counselor and head of the IMF's research department, said in a statement.

Ongoing geopolitical conflicts raise the risk of downgrading in certain parts of the world, most notably Russia. Emerging economies, including Russia, counted for the "lion's share" of global growth, but at 4.4 percent it remains a lower number than previously predicted.

"This slowdown is due to lackluster domestic demand and the impact of increasing geopolitical tensions, especially on Russia and neighboring countries," according to the IMF.

U.S. a Rare Bright Spot in IMF's Gloomy Growth Outlook | World
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