The global lender said advanced economies would only grow 1.4 percent this year and 1.9 percent in 2013.

It chopped its forecast for growth in emerging economies this year and next, projecting they will expand 5.9 percent in 2013 and 5.6 percent in 2012. Both figures are 0.1 percentage point lower than in April.

The IMF cut its growth forecast for the crisis-hit euro zone to 0.7 percent in 2013, while maintaining its projection of a 0.3 percent contraction this year. It said it now believes Spain's economy will shrink both this year and next.

The IMF sharply revised down its growth projections for the United Kingdom to 0.2 percent this year and to 1.4 percent in 2013. In April, the fund said the UK economy would expand 0.8 percent in 2012 and 2.0 percent next year.

MOVING IN THE RIGHT DIRECTION, BUT ...

The fund praised measures adopted by European leaders at a summit in June as "steps in the right direction" but called for more fiscal and banking integration. It urged the creation of a pan-European deposit insurance guarantee program and a mechanism to resolve failing banks.