IMF upgrades economic outlook

The International Monetary Fund released its latest projections for economic growth for 2009 and 2010 and said that the global economy is "beginning to pull out of the recession" but the recovery is expected to be uneven and sluggish.



The US is expected to see 0.8% growth in GDP next year, up from the April forecast of 0.0%, while the IMF sees improvement in China and developing nations.

Japan will get a lift from improved consumer confidence, progress in inventory adjustment, aggressive fiscal policies, and strong performance by some other Asian economies, the IMF said.

But the eurozone may continue to languish. Rising unemployment will weigh on consumption and activity, as will the economy’s heavy dependence on a still-ailing banking sector.

The president of the ECB has been encouraging banks in Europe to raise capital. Last month an ECB financial stability expert said new banking problems may emerge next year if the recovery is slow. See ECB expert issues warning.