IMF boosts economic forecast but recovery still slow
The International Monetary Fund (IMF) has increased its 2010 global economic growth forecast to 2.5 percent, up from 1.9 percent last quarter, but warns that recovery would still be slow.
Despite raising expectations for 2010, the IMF retained their prediction of contraction for this year, re-forecasting at 1.4 percent, fractionally more than their April outlook of a 1.3 percent contraction.
“While the world economy is still in recession, the recovery is coming. But it is likely to be a weak recovery,” said Olivier Blanchard, IMF chief economist.
The report showed indications that government assistance had led to better financial conditions than expected, but the effects of that support will “gradually diminish”.
It added that “the rate of decline in economic activity is moderating, although to varying degrees among regions”.
The IMF boosted its estimates of the USA from zero growth to 0.8 percent growth, and Japan from 0.5 percent to 1.7 percent but predicted that Europe would decline further, forecasting a 4.8 percent contraction, up by 0.6 percent from their April outlook.
China and India continued to lead the way with respective growth numbers estimated at 7.5 percent and 5.4 percent.