Washington - The International Monetary Fund is a little more optimistic about global economic growth as European nations have taken action to cope with their debt crisis, and the U.S. economy grew a little faster.
Speaking about the IMF's “World Economic Outlook” on Tuesday, research director Olivier Blanchard said the global economy has been on a “roller coaster” for the past six months, leaving an “uneasy calm.”
The International Monetary Fund's report comes as officials from the many member nations of the IMF and the World Bank gather in Washington for talks this week.
Blanchard said the world economy will expand by about 3.5 percent this year, and a little faster next year. The report says emerging markets will continue to grow faster than developed economies.
For example, the United States' economy will expand 2.1 percent in 2012, Europe will shrink by three-tenths of a percent, while China will expand more than 8 percent.
The IMF also says the United States must come up with plans to cut debt over the medium term, but avoid slashing spending or raising taxes so quickly that it hurts the current recovery. The lender urges Europe to continue and expand efforts to boost its economy.
The global lender said Sub-Saharan Africa had another year of strong growth, and is one of the areas least affected by the recent financial turmoil.
The eurozone recently agreed a second multi-billion-euro bailout for Greece, making a default of the country less likely, and has created a permanent rescue fund, hoping to contain a crisis that has dragged on for years.
Separately, the US unemployment rate has fallen to 8.2%, the lowest rate since 2009, raising hopes for a recovery in the world's largest economy.
"With the passing of the crisis, and some good news about the US economy, some optimism has returned," the IMF said.
But it added the "risk of another crisis is still very much present".
As if to underline that point, Spain is the only eurozone country whose growth has been revised even lower for 2012.
Spain's 10-year bond yields have risen past 6%, making it more expensive to borrow as investors fear that Spain will need a bailout.
Investors have been worried by data showing Spain's banks are entirely dependent on emergency ECB loans, as the nation suffers from a deep economic slump brought about by a bust in its property and construction markets.
On Tuesday, the rate for Spanish 18-month bonds almost doubled to 3.1%, suggesting that rates could rise significantly at a more important sale of 10-year bonds on Thursday.
Unemployment is the highest in Europe, with a record 4.75 million out of work. Half of Spain's under-25s are unemployed.
The IMF expects Spain to contract by 1.8% in 2012, compared with its previous prediction of a contraction of 1.6%.
The 17 countries of the eurozone are expected to shrink this year, but less than previously forecast, by 0.3% rather than 0.5%.
The IMF's latest World Economic Outlook came a day after the World Bank appointed a new president, the US's Jim Yong Kim.
By convention, the US has always held the top job at the World Bank since it was founded in 1944.
The top job of its sister organisation, the International Monetary Fund, has also always gone to a European but there has been much pressure from emerging economies to open the processes of both organisations to competition.
The IMF is currently led by France's Christine Lagarde.
timesofearth.com
Speaking about the IMF's “World Economic Outlook” on Tuesday, research director Olivier Blanchard said the global economy has been on a “roller coaster” for the past six months, leaving an “uneasy calm.”
The International Monetary Fund's report comes as officials from the many member nations of the IMF and the World Bank gather in Washington for talks this week.
Blanchard said the world economy will expand by about 3.5 percent this year, and a little faster next year. The report says emerging markets will continue to grow faster than developed economies.
For example, the United States' economy will expand 2.1 percent in 2012, Europe will shrink by three-tenths of a percent, while China will expand more than 8 percent.
The IMF also says the United States must come up with plans to cut debt over the medium term, but avoid slashing spending or raising taxes so quickly that it hurts the current recovery. The lender urges Europe to continue and expand efforts to boost its economy.
The global lender said Sub-Saharan Africa had another year of strong growth, and is one of the areas least affected by the recent financial turmoil.
The eurozone recently agreed a second multi-billion-euro bailout for Greece, making a default of the country less likely, and has created a permanent rescue fund, hoping to contain a crisis that has dragged on for years.
Separately, the US unemployment rate has fallen to 8.2%, the lowest rate since 2009, raising hopes for a recovery in the world's largest economy.
"With the passing of the crisis, and some good news about the US economy, some optimism has returned," the IMF said.
But it added the "risk of another crisis is still very much present".
As if to underline that point, Spain is the only eurozone country whose growth has been revised even lower for 2012.
Spain's 10-year bond yields have risen past 6%, making it more expensive to borrow as investors fear that Spain will need a bailout.
Investors have been worried by data showing Spain's banks are entirely dependent on emergency ECB loans, as the nation suffers from a deep economic slump brought about by a bust in its property and construction markets.
On Tuesday, the rate for Spanish 18-month bonds almost doubled to 3.1%, suggesting that rates could rise significantly at a more important sale of 10-year bonds on Thursday.
Unemployment is the highest in Europe, with a record 4.75 million out of work. Half of Spain's under-25s are unemployed.
The IMF expects Spain to contract by 1.8% in 2012, compared with its previous prediction of a contraction of 1.6%.
The 17 countries of the eurozone are expected to shrink this year, but less than previously forecast, by 0.3% rather than 0.5%.
The IMF's latest World Economic Outlook came a day after the World Bank appointed a new president, the US's Jim Yong Kim.
By convention, the US has always held the top job at the World Bank since it was founded in 1944.
The top job of its sister organisation, the International Monetary Fund, has also always gone to a European but there has been much pressure from emerging economies to open the processes of both organisations to competition.
The IMF is currently led by France's Christine Lagarde.
timesofearth.com
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