The new forecast would be down on last year's 5.0 percent growth but remains more than half a point above the average growth rate of the last 20 years and well above the 3.8 percent average forecast of economists polled by Reuters last month.
The G7 source said the IMF would also cut its forecast for G7 growth by 0.2 points in 2005 and 0.1 points in 2006. For the European Union, its forecasts will fall by 0.3 points this year and 0.2 points in 2006, the source said.
A 0.3 point cut in the IMF's existing 2005 EU forecast would put the new forecast at 2.2 percent for the year.
The IMF's September outlook did not highlight a separate G7 forecast but it forecast "Advanced Economies", the G7 plus other major industrialised nations, would grow by 2.9 percent this year and 3.0 percent next.
The Group of Seven rich nations are considering the idea that the International Monetary Fund (IMF) could sell gold reserves to fund a British-backed plan to relieve developing world debt, a G7 source said.
Britain has proposed to cancel the debt that 27 of the world's poorest countries owe to the IMF, the World Bank, and the African Development Bank (ADB).
"If the plan is adopted we would have to recapitalise these institutions, especially the World Bank and the ADB. The IMF could meet the costs through the sale of gold," the source said, making clear this was an option being mooted in the G7.
He was speaking ahead of a meeting of G7 finance ministers in London this weekend.
The IMF is the world's third biggest holder of gold bullion with more than 100 million ounces in its reserves. The proposal backed by British finance minister Gordon Brown calls for revaluing these reserves to levels achieved in the recent boom market in gold and other precious metals, rather than outright sales.
Under the British plan, with current spot gold prices at about $415 an ounce, the value of some 90 million ounces of the IMF reserve that are pegged at just above $40 an ounce under a 1971 agreement would soar tenfold.
As part of a larger debt relief plan, that huge increase in value would be set against the hundreds of millions of dollars that impoverished countries owe to the IMF.
Gold market analysts say IMF gold sales as opposed to revaluation would be a significant negative factor for the gold market, whereas revaluation would not have an impact.
The G7 source noted that there was some resistance within the G7 to Britain's plan on debt forgiveness. Italy, for example, is concerned about its implications for the national budget, he said.
Any proposal to revalue or sell IMF gold would need 85 percent majority of total voting power, giving the United States a strong hand as it holds more than 17 percent voting power.