The International Monetary Fund (IMF) believes the US Federal Reserve will gradually move to tighten its monetary policy while the European Central Bank should keep rates on hold, La Repubblica newspaper reported.
La Repubblica said on Saturday it had obtained a copy of the IMF's latest economic report that is due to be published on April 21 ahead of an IMF/World Bank meeting in Washington.
The Italian daily said the IMF would project higher growth for 2004 than previously foreseen in a number of countries, including the United States and Japan, while Italy was expected to see a weaker economy than expected.
The report called Fed monetary policy "very accommodating" up until now and added that it would progressively "move towards a more neutral position so that when the time came for a tightening the markets would not be taken by surprise".
La Repubblica quoted the IMF as saying the ECB's current monetary policy would be "appropriate until the emergence of more convincing signs of a pickup based on internal demand".
The paper said the IMF would forecast US economic growth of 4.6 percent this year compared with a 3.9 percent projection made last year.
Japan's economy would grow 3.2 percent, 1.8 percentage points more than in the last IMF outlook, while British growth this year was seen up 0.7 percentage points at 3.2 percent.
Average growth in the euro zone was seen at 1.9 percent, with Italian GDP seen growing just 1.4 percent against a previous IMF target of 1.7 percent, La Repubblica said.
"In the short term world growth could be stronger than expected," the IMF was quoted as saying.
However, the report warned of "significant risks", tied to the volatility of oil prices, the US twin deficits, weak European internal demand and geopolitical tensions.
La Repubblica also quoted the IMF as saying that budget-deficit-to-GDP ratios in the eurozone would be an average 2.7 percent in 2004 from 2.9 percent in 2003, with the German ratio seen at 3.5 percent and the French ratio at 3.8 percent.
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