The global economic recovery is gaining strength, with a projected growth of about 4.5 per cent in both 2011 and 2012. However, unemployment remains high, and risks of overheating are building in emerging market economies, the IMF said in its latest forecast.
Gross domestic product (GDP) in real terms is expected to expand 2.5 per cent in advanced economies while emerging and developing economies are expected to expand by 6.5 per cent in the two years.
IMF said the high commodity prices have presented new policy challenges, while old challenges - fiscal and financial repair and reform and rebalancing of global demand - remain in progress.
"Given the improvement in financial markets, buoyant activity in many emerging and developing economies and growing confidence in advanced economies, economic prospects for 2011-12 are good," the IMF said in its April 2011 World Economic Outlook (WEO).
However, disruptions to oil supply pose new risks to the recovery, the report said.
"Fears have turned to commodity prices," said Olivier Blanchard, Chief Economist at the IMF. "Commodity prices have increased more than expected, reflecting a combination of strong demand growth and a number of supply shocks. These increases conjure the specter of 1970s-style stagflation, but they appear unlikely to derail the recovery," he said at a press conference in Washington.