The International Monetary Fund said in a World Economic Outlook report that more rate cuts could be necessary from the U.S. Federal Reserve.
The IMF revised down growth expectations for the U.S. in 2008 to 0.5% from 1.5% forecast in January. For 2009, U.S. growth is expected at 0.6%.
"The effects of the financial turmoil in the United States has been to lower the prospects of growth, but, somewhat paradoxically, it has also increased oil prices, metal prices, and of course food prices," IMF chief economist Simon Johnson said in a research report, adding he saw inflation as a global concern.
By Todd Wailoo and edited by Cristina Markham