The International Monetary Fund says the world economy is recovering from the global crisis better than expected but at different speeds in different parts of the world.
In an updated economic outlook, the IMF said the United States is off to a better start than Europe and Japan. The IMF expects U.S. GDP to grow 3.1 percent this year after last year’s drop of 2.4 percent.
Growth this year is forecast at 10 percent for China and 8.8 percent for India. Among emerging and developing economies, emerging Asia is recovering fastest while many emerging European and some Commonwealth of Independent States economies are lagging.
The IMF forecast that the world economy will expand 4.2 percent this year, an improvement of 0.3 percent from the January forecast. The IMF’s projection of a 4.3 percent increase for 2011 remains unchanged.
Until the current recession, annual global container volume had increased at about three times the rate of GDP growth for nearly three decades. Most economists predict a slower multiple during the next few years.
In the depth of the crisis last year, world economic activity contracted by 0.6 percent as world trade slumped and credit froze up.
“We find ourselves at an important new stage of the crisis,” IMF Research Department Director Olivier Blanchard told a news briefing in Washington. “A global depression has been averted. The world economy is recovering, and recovering better than we had previously thought likely.”
But the IMF said the outlook remains unusually uncertain and that fiscal risks, including rapid increases in public debt, could undermine the recovery. The IMF report said policies are needed to reduce sovereign risk, unwind stimulus spending, combat unemployment, buttress financial stability, enact financial reform and rebalance global demand.
Contact Joseph Bonney at firstname.lastname@example.org.