IMF raises economic forecast global economy

01-28-2010 12:26

The International Monetary Fund (IMF) has revised upwards its forecast for how much the worldwide economy will expand this year. It now forecasts that the global economy will grow by 3.9% in 2010, in comparison to October’s estimation of 3.1%. The new World Economic Outlook report features the latest data, as the IMF stated that the Chinese economy shows the biggest economic growth.

Unemployment

27 million people became unemployed last year, according to the separate International Labour Organization (ILO) report.
Approximately 212 million people were without jobs at the end of 2009, according to the ILO. However, it forecasts that this year’s joblessness will approximately approach last year’s levels, increasing modestly to 213 million.

Different speeds

Several wealthy economies grow rather slowly, the International Monetary Fund stated. Nevertheless, it now estimates that the largest economy on the globe, the US, will grow by 2.7% in 2010, in comparison to the preceding forecast of a 1.5% growth.
The IMF expects that the Chinese economy will expand 10% in 2010, as it will grow by 9.7% next year.
“The worldwide economy is likely to grow stronger than previously forecasted but the individual economies grow at different speeds,” the International Monetary Fund commented.

Economic estimations

The latest economic estimations followed the official data that demonstrated that the United Kingdom found its path out of recession in the fourth quarter of last year, as the British economy grew 0.1%, which is less than previously projected.
It now estimates that the British economy will expand 1.3% this year, up from the 0.9% estimate it published back in October.
For the 16-nation euro area, the International Monetary Fund estimates that the Euro zone economy will grow by 1% in 2010, compared with its earlier forecast of 0.3%.

Stimulus measures

It stated that one of the major reasons for raising its estimations was the ‘unusual’ amount of crisis support measures, which should be continued by the governments.
“Withdrawing the government stimulus measures too early and incoherently could jeopardize the worldwide economic expansion and its rebalancing,” the IMF commented.

Credit markets

Commercial banks around the globe may need to increase a ‘considerable’ amount of additional funds in order to boost the ongoing improvement of the credit markets and the global economy, according to the latest edition of the IMF’s separate Global Financial Stability Report.