The International Monetary Fund has cut its forecast for global and U.S. economic growth in 2016.
Citing weakness in the developing world, the IMF released an updated forecast this morning that says the world economy will grow 3.4%, down from an October forecast of 3.6%. The international lending agency downgraded the outlook for developing economies to 4.3% growth from a forecast of 4.5% in October.
As The Associated Press reports, the world economy grew 3.1% and developing economies 4% in 2015. Both figures were the weakest since the recession year 2009. China’s slowing economy and falling commodity prices have hurt countries in the developing world that export raw materials.
Since the 2008 financial crisis and the Great Recession, the IMF, the World Bank and others have consistently overestimated the strength of the world economy and have later had to downgrade their initial predictions. Earlier this month, the World Bank cut its forecast for global growth to 2.9% from the 3.3% growth it expected last June.
The IMF has also trimmed its forecast for U.S. economic growth to 2.6% this year from 2.8%, noting the prospect of higher American interest rates. In December, the Federal Reserve raised the short-term interest rate it controls from near zero, where it had been since December 2008.
