The International Monetary Fund has upgraded its 2010 global growth forecast, due to robust growth in Asia and renewed US private demand. But the IMF signalled big risks to the recovery from Europe's debt problems.
The IMF raised its 2010 world output forecast to 4.6% from 4.2% previously, but said sovereign debt risks in Europe could escalate and drag on the global economy. The figures were in the latest updates of its World Economic Outlook and Global Financial Stability reports.
'Downside risks have risen sharply amid renewed financial turbulence. In this context, the new forecasts hinge on implementation of policies to rebuild confidence and stability, particularly in the euro area,' the IMF said.
The IMF cut its 2011 GDP growth forecasts for Britain, Canada, the euro zone, emerging economies and Japan.
The euro area's 2010 GDP was seen expanding by 1%, unchanged from the last forecast in April, though the 2011 GDP forecast was trimmed by 0.2 percentage points to 1.3%. The 2010 US GDP growth forecast was raised to 3.3% from 3.15 previously, and the 2011 growth forecast was increased to 2.9% from 2.6%.