Page last updated at 17:33 GMT, Tuesday, 26 January 2010

IMF more upbeat on world economy

Cargo ship being loaded at a Chinese port
The IMF is now more optimistic about the global economy

The International Monetary Fund (IMF) has raised its projection for how much the global economy will grow in 2010.

It now predicts that the worldwide economy will expand by 3.9% this year, up from the 3.1% estimate it published back in October.

The new figure came in the IMF's latest World Economic Outlook report, which said the growth was being led by China

A separate International Labour Organization (ILO) report said that 27 million people lost their jobs in 2009.

The ILO said that there were about 212 million people out of work by the end of last year.

But it expects unemployment in 2010 to stay at about the same levels, rising slightly to 213 million.

'Different speeds'

The IMF said some advanced economies were seeing more sluggish growth.

However, it now expects the US - the world's largest economy - to expand 2.7% this year, up from its previous estimate of 1.5% expansion.

For China, the IMF predicts growth of 10% this year, slowing slightly to 9.7% in 2011.

A key risk is that a premature and incoherent exit from supportive policies may undermine global growth and its rebalancing
IMF

"The global recovery is off to a stronger start than anticipated earlier but is proceeding at different speeds in the various regions," said the IMF.

Its latest economic projects came after official figures showed that the UK emerged from recession in the last quarter of 2009, with the economy growing by a weaker-than-expected 0.1%.

The IMF now predicts that the UK economy will grow by 1.3% in 2010, compared with its October forecast of a 0.9% expansion.

Across the 16 European nations that share the euro, the IMF expects the eurozone economy to expand by 1% this year, up from its previous estimate of 0.3%.

It said one of the main reasons for its upwardly revised figures was the "extraordinary" amount of government stimulus measures, which it said needed to continue.

"A key risk is that a premature and incoherent exit from supportive policies may undermine global growth and its rebalancing," said the IMF.

The IMF's separate Global Financial Stability Report update, also released on Tuesday, said commercial banks around the world may need to raise a "substantial" amount of extra capital to support the continuing recovery of the credit markets and the wider economy.



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