Balancing the strong growth numbers for the first half of 2010 and the adverse impact of increased financial turbulence, the IMF forecasts world growth to rise to 4 Â½ percent this year, before falling somewhat to 4 Â¼ percent in 2011–with the world average masking large differences around the globe.
But despite the stronger than expected first half recovery, the IMF warned that uncertainties surrounding sovereign and financial sector risks in parts of the euro area could spread more widely, posing difficulties for both financial stability and the economic outlook.
“While we predict the recovery will continue, it is clear that downside risks have risen sharply,â€ Olivier Blanchard, the IMF’s chief economist, told reporters. Blanchard and JosÃ© ViÃ±als, respectively the Fund’s Economic and Financial Counselors, launched updates to the IMF’s World Economic Outlook (WEO) and Global Financial Stability Report (GFSR) in Hong Kong for the first time.
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