ZURICH - THE International Monetary Fund will lower its growth outlook as the continued credit crisis hurts the US and European economies, while global imbalances also weigh on growth, its top economist was quoted as saying.

'Given this background, the numbers will indeed be weaker than in our latest World Economic Outlook,' IMF Chief Economist Simon Johnson told Switzerland's Finanz und Wirtschaft business newspaper in an interview on Saturday.

The IMF already lowered the forecasts from its July World Economic Outlook in October.

'We will not be able to stick to 1.9 per cent 2008 Gross Domestic Product growth for the United States, nor to 2.1 per cent for Europe,' Mr Johnson said.

'By how much we will have to lower our GDP forecasts, we will know in January,' he said.

The Fund already warned in November the global economic growth outlook had dimmed, because of a troublesome mix of tigher credit terms and rising energy prices.

The US dollar remained overvalued despite its continued drop since 2002, Mr Johnson said, which could be an obstacle for the US trade deficit to gradually diminish.

Too high oil prices and the undervalued Chinese currency boosting exports in US trading partners formed the other side of the trade imbalance equation, he said.

The Chinese yuan - which the West has often said is held articially low by the government - was the biggest problem and oil prices should ideally come down to between US$60 and US$70 a barrel, from prices above US$90 now.

'Oil prices are having an impact on short-term inflation expectations in particular, and could lead the US central bank to be less inclined to lower interest rates further,' he said.

The IMF did not have a foreign exchange target in mind for the greenback, but it should fall even further despite its persistent decline, to help diminish the US trade deficit and the chance of disorderly currency movements. -- REUTERS