U.S. Economic Growth Projected to Be World's Highest at 3.6%

U.S. economic growth will average 3.6% this year, the fastest among the world's leading industrialized nations, according to a new International Monetary Fund report. The IMF report said companies will lead the growth as they spend record amounts to retool plants and upgrade computers, offsetting slower consumer spending brought on by higher interest rates. The IMF prediction was an increase from September's outlook for U.S. growth of 3.5% for 2005.

That pace of growth would lead the Group of Seven industrialized countries. The U.S. economy advanced at an annual rate of 3.8% in the fourth quarter of last year, capping the best year of growth since 1999. Our economy grew by 4.4% last year.

Canada will post the second-fastest growth in the G-7 this year, at 2.8%, the report said. The G-7 also includes Japan , Germany , the U.K. , France and Italy . The report projected the U.S. also will lead the G-7 in 2006, repeating this year's 3.6% pace.

The economic projections were made long before the devastation of Katrina. Economists will be watching to see the effect the storm and its subsequent economic impact will have.