IMF cuts global growth forecast for 2015

Olivier Blanchard said China's stock market bubble had "burst"

The International Monetary Fund has cut its forecast for global growth this year, as a result of a slowdown in the US economy.

The IMF now says the global economy will expand by 3.3% in 2015, compared with a previous forecast of 3.5%.

Last month, the IMF lowered is forecast for US growth to 2.5% in 2015 from an earlier estimate of 3.1%.

The US is a drag on the world economy, according to the IMF, because of "an unexpected output contraction".

The US economy contracted at an annual rate of 0.2% in the first quarter of the year after being hit by bad weather.

Eurozone

The IMF said Greece's crisis was having a only a marginal effect on the global economy and it left its eurozone growth forecast for 2015 unchanged at 1.5%.

It predicted Germany would grow by 1.6% and France by 1.2%, also unchanged from the previous forecast.

The IMF has left its forecast for growth in China unchanged at 6.8%, despite the recent stock market volatility.

"The bubble has burst," Olivier Blanchard, director of the Research Department at the IMF, said of the Chinese stock market's wild swings.

But he did not say that China's stock market volatility would drag down the global economy.

The IMF also cited Greece's debt crisis as a continuing risk to the global economy, but said the events in China and Greece "have not changed the broad outlook picture for the global economy".

In 2016, the IMF expects global growth to strengthen to 3.8%.