IMF expects slow recovery from global recession

The global economy is beginning a sluggish recovery from its worst recession since World War II, the International Monetary Fund says. The IMF increased its estimate for global economic growth in 2010 to 2.5%, from an April projection of 1.9%. At the same time, it slightly downgraded its forecast for this year to 1.4%, from 1.3%. “The global economy is still in recession, but we’re inching towards the recovery,” says Olivier Blanchard, director of the IMF’s research department. “It’s much too early” to cut back on government and central bank efforts to stimulate growth, he says. Financial conditions have improved faster than the IMF expected when it made its previous global forecast in April, the fund says, largely due to government support for banks and other financial companies. Much of the global recovery will be driven by emerging economies such as China and India, the IMF says. China’s economy is expected to grow by 8.5% in 2010, a full point higher than previously forecast. India is expected to grow 6.5% next year, 0.9 percentage points higher that the previous forecast. Advanced economies such as the United States, Europe and Japan, meanwhile, aren’t expected to show sustained growth until the second half of next year, the IMF says.