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IMF Cuts Global Growth Outlook

The International Monetary Fund has lowered its forecast for global economic growth in 2015, and urged governments and central banks to back policies and reforms to support growth.

In its latest World Economic Outlook report issued on January 20, the IMF projected global growth at 3.5 percent for 2015 and 3.7 percent for 2016, lowering its forecast by 0.3 percentage points for both years.

The IMF's chief economist, Olivier Blanchard, said new factors supporting growth, including lower oil prices, were being offset by negative forces, "including the lingering legacies of the crisis and lower potential growth in many countries."

Projections for emerging economies were broadly cut back, with the outlook for oil exporters Russia, Nigeria and Saudi Arabia worsening the most.

The United States is the only major economy to see its economic forecast upgrade by the IMF, with projected growth raised to 3.6 percent from 3.1 percent for 2015.

The United States largely offset prospects of more weakness in the euro area, where only Spain's growth was adjusted upward.

Russia, already pressed by sanctions over its support for pro-Russian rebels in eastern Ukraine, is particularly hurt by lower oil prices.

The IMF now says the country's economy will contract 3.0 percent this year and 1.0 percent in 2016.

In October, the IMF was still predicting slight growth for the country.

China, the second largest economy, will expand at 6.8 percent this year -- 0.3 percent slower than previously expected -- and 6.3 percent in 2016, the IMF said.

The impact of slower Chinese growth will spill over especially to other Asian countries, the IMF predicted.

In related news, the UN labor organization predicts global unemployment will continue to rise due to slower economic growth and market turbulence.

In a fresh report, the International Labor Organization (ILO) said 201 million people were jobless around the world in 2014.

The ILO report issued on January 20 predicted global unemployment will rise by 11 million to 212 million by 2019.

ILO Director-General Guy Ryder said the "jobs crisis is far from over," adding that more than 61 million jobs have been lost since 2008 when the global financial crisis began.

The report by the ILO and the forecast by the IMF come ahead of the start on January 21 of the World Economic Forum, the annual gathering of political and business leaders in the Swiss ski resort of Davos.

With reporting by Reuters and AFP