US Economy to Pick Up in Second Half

DUBAI -- U.S. economic growth will pick up in the second half of this year as business investment gathers momentum, International Monetary Fund Managing Director Rodrigo Rato said on Tuesday.

In its twice-yearly World Economic Outlook, the IMF lowered the forecast it made in September for 2007 growth in U.S. gross domestic product to 2.2 percent from 2.9 percent.

It said GDP growth should pick up to 2.8 percent in 2008.

"We see recovery and acceleration of growth in the second half, and especially interesting is the view that business investment is stronger than in December last year," Rato told a news conference in Dubai.

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He urged Beijing to move quickly to cool the Chinese economy, which surged 11.1 percent in the first quarter, raising concern it was overheating.

"We believe strong use of monetary policy will be useful for cooling the economy. So the exchange rate policy has to be applied more vigorously than it was in 2005 to avoid risk in future," he said.

Rato shrugged off the euro's rise this year, saying the European currency's value was "perfectly reasonable".

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