The International Monetary Fund downgraded its global growth forecast for 2013 from 4.1% in April to 3.9%. The UK had the biggest revision from 2% to 1.4%. The IMF expects the euro zone to contract 0.3% this year before rebounding by 0.7% in 2013. The U.S. economy is expected to grow 2% this year and 2.3% next year. However, the IMF stressed the need for U.S. lawmakers to solve the deadlock on how to deal with the fiscal cliff or face static growth in 2013. Emerging economies are now forecast to see growth slow to 5.6% this year before picking up to 5.9%. The IMF predicts growth in advanced economies to expand by 1.4% this year and 1.9% next year. Inflation is expected to ease as demand and commodity prices weaken.

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