The International Monetary Fund is painting a much more optimistic picture of the U.S. economy than before. The agency now predicts a 2.5% GDP contraction this year, compared with its previous forecast of a contraction of 2.8%. In addition, the IMF now expects the U.S. economy to expand by 0.75% next year. The IMF projects core inflation will remain low while unemployment peaks near 10% in 2010.

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