IMF Boosts 2010 World Economic Growth Estimate

IMF Boosts 2010 World Economic Growth Estimate
By Michael Bowman
Washington
08 July 2009

The International Monetary Fund has boosted its world economic growth
estimate for next year, but says the global recovery will be weak.

In a new report, the IMF says it expects the world economy to shrink
by 1.4 percent this year, but expand by 2.5 percent in 2010. The new
growth projection is up from a 1.9 percent estimate issued in April.
IMF Research Director Olivier Blanchard:

"The good news is that the forces down are decreasing in intensity,
said Blanchard. "The bad news is that the forces pulling the economy
up are still very weak.

Blanchard says an anemic recovery is on the way, one that initially
will not generate enough jobs to reverse rising global unemployment
rates. He says developing economies will experience a quicker and more
pronounced recovery than advanced industrialized nations.

"Output in advanced countries is forecast to decline by 3.8 percent in
2009 before growing at a low 0.6 percent in 2010," he said. "By
contrast, output in emerging market countries is forecast to grow at
1.5 percent in 2009 and 4.7 percent in 2010."

Blanchard said Asia, in particular, is poised for an economic rebound.

"After a tough first quarter [of this year], Asia is now set for a
stronger performance than we had anticipated earlier," said Olivier
Blanchard. "This is due in no small part to strong fiscal stimulus,
notably in China and India, where we have revised our forecast up by
nearly 1 percent for both 2009 and 2010."

The IMF research director stressed, however, that the global economic
recovery is fragile and subject to risk. He said policymakers around
the world must continue to strengthen battered financial systems. In
industrialized nations like the United States, he said continued
economic stimulus must be paired with reforms that will reduce
government debt in the years to come.
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