The International Monetary Fund (IMF) said on Monday the U.S. economy is expected to grow by 2.8 percent in 2011, a 0.2 percentage point lower than its previous forecast.
“The U.S. economy continues to recover, with easing financial conditions supporting private final demand in the face of higher commodity prices,” said the IMF in its latest World Economic Outlook (WEO) report which kicked off the one-week-long programs of the IMF and World Bank Spring Meetings held here in Washington DC.
“Job creation has recently accelerated, but the pace of improvement in the labor market remains disappointing considering the size of the job losses during the decline,” noted the IMF.
The report also projected the U.S. output will grow by 2.9 percent in 2012. The new figure is 0.2 percentage points higher than its forecast in January.
The Fund said that following a burst of strong growth driven by inventory restocking in late 2009 and early 2010, U.S. economic growth slowed but then strengthened again in the second half of 2010.
This strengthening was supported by private final demand, and by the fourth quarter consumer spending which was rising at its fastest pace in five years.
The U.S. financial conditions have generally improved but corporate borrowing rates remain very low, and tight bank lending conditions are now starting to ease not just for large firms but for small- and medium-sized firms.