27 Jan 2010

IMF raises global growth forecasts

11:34 am on 27 January 2010

The International Monetary Fund has lifted its expectations about global growth, but says government spending and low interest rates will drive expansion - not consumer spending and business investment.

The IMF now predicts the international economy will expand by 3.9% this year, an increase from the 3.1% it estimated in October.

Chief economist, Olivier Blanchard says private spending is still to recover in developed nations and governments cannot afford to withdraw their stimulus measures just yet.

The agency says growth is being led by China, which it expects to expand by 10% this year and 9.7% next year, and other developing nations.

Economic expansion in developed nations is predicted to be more sluggish, though the United States is forecast to expand 2.7% this year, compared with 1.5%.