IMF cuts world growth outlook as euro fears rise (by William L. Watts)

FRANKFURT (MarketWatch) -- The International Monetary Fund, in an update to its world economic outlook, cut its forecast for global growth in 2012 and 2013 due to intensifying risks from the euro zone's ongoing debt crisis. The IMF said it expects world output to grow 3.3% in 2012, down from 3.8% in 2011 and down from a forecast of 4% in September. The IMF sees 2013 growth of 3.9%, down from a previous estimate of 4.5%. The euro-zone economy is forecast to contract 0.5% in 2012, down from a previous forecast for growth of 2.1%. In 2013, the euro-zone is forecast to expand 0.8% versus a previous estimate of 1.5%. The IMF left its forecast for 2012 U.S. growth unchanged at 1.8%, while cutting its 2013 forecast to 2.2% from 2.5%. Japan is expected to grow 1.7% in 2012 and 1.6% in 2013, down from September estimates of 2.1% and 2%, respectively.