ISTANBUL, Turkey (AP) -- The International Monetary Fund said Thursday that the global economy is recovering faster than expected -- but warned governments against premature withdrawal of stimulus efforts.
The positive report card was likely to feed a cautious but widespread relief that -- despite continuing unemployment woes and halting efforts to improve regulation of financial markets -- the downturn is easing and may prove less devastating than initially feared.
According to the twice-yearly World Economic Outlook, the world is poised to grow by 3.1 percent in 2010 with much of the recovery driven by emerging economies such as China and India. That is up from the 2.5 percent in the IMF's previous set of estimates. And for 2009, the IMF now finds a 1.1 percent decline of global GDP instead of the 1.4 percent contraction it predicted in July.
But it warned against premature withdrawal of stimulus efforts and said uncertain growth in the developed world could soon put governments in a vise -- between keeping their stimulus spending going, or cutting it back to avoid ruining their finances with debt and deficits.
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