IMF raises global growth forecast to 3.1 per cent in 2010

The International Monetary Fund (IMF), in its latest World Economic Outlook, upgraded the growth forecast for global economy to 3.1 per cent in 2010 from the July estimate of 2.5 per cent, up by 0.6 per cent.

It has also trimmed down the global GDP contraction for 2009 by 0.3 per cent to 1.1 per cent from the earlier figure of 1.4 per cent. 

The Washington-based lender said that the global economy is on the rise again, driven by emerging Asian countries, mainly China and India. It stressed that the priorities of the governments should be in restoring financial health and continued macro policies.

IMF chief economist Olivier Blanchard said, ''The recovery has started. Financial markets are healing. In most countries, growth will be positive for the rest of the year, as well as in 2010.''

Blanchard stressed that, to sustain the recovery, private consumption and investment will have to strengthen as high public spending and large fiscal deficits are unwound.

''The current numbers should not fool governments into thinking that the crisis is over,'' he warned at a press conference. He urged countries around the world to coordinate policies to achieve a global rebalancing and sustain the recovery.

The overall growth forecast for emerging and developing economies is around 5.1 per cent in 2010, up from 4.7 per cent as per earlier estimate, after achieving 1.7 per cent growth in 2009. The fund has raised its 2010 estimate for China from 8.5 per cent to 9.0 per cent, while for India the estimate is marginally lower at 6.4 per cent from the earlier forecast of 6.5 per cent.