The world economy has recovered better than expected from its deepest recession in six decades and emerging economic powerhouses like China will likely continue leading the way, the International Monetary Fund (IMF) said Wednesday.
The IMF painted a more sobering picture for wealthier countries, which remain saddled with high unemployment rates, unsustainable budget deficits and face a "sluggish" economic recovery.
In a semi-annual report on the world economy, the IMF said the recovery was gathering steam as financial sectors were healing and trade flows were rising. It predicted global growth of 4.2 per cent in 2010, up slightly from a January forecast of 3.9 per cent. Its 2011 growth prediction remained steady at 4.3 per cent.
Much of the growth is because of developing economies, which together will climb 6.3 per cent this year and 6.5 per cent next year. Advanced economies by contrast will grow just 2.3 per cent in 2010 and 2.4 per cent the following year.
Wealthier countries may never catch up, the result of "lasting damage" from a 2008 financial crisis that has devastated the wealth of households and forced many to spend money more cautiously.
While the crisis may have started in the United States, the world's largest economy is recovering faster than that of Europe and Japan. The US economy is predicted to grow by 3.1 per cent this year, compared to 1 per cent for the eurozone and 1.9 per cent for Japan.
A recovery may have taken hold even in the industrial world, but much of the growth over 2009 was the result of a massive injection of public funds into the economy. There were "few indications" that private sectors in the US, Europe or Japan could fill the gap and fuel a strong recovery, the IMF said.
Moreover, governments in wealthy economies had mostly run out of room to prop up their private sectors with public cash. That risked "leaving these fragile recoveries exposed to new shocks" in the coming year, the IMF said in its World Economic Outlook report.
The financial crisis caused the entire global economy to shrink 0.6 per cent in 2009. Yet the recovery picture is far different for emerging powers, which if anything faced a risk of their economies overheating in the coming years.
China's economy was projected to grow 10 per cent in 2010, India's by 8.8 per cent and Brazil's by 5.5 per cent, according to the IMF.
Developing powers have benefited from a sudden flow of investment out of struggling Europe and the US, but the IMF has warned that this carried its own risk of causing the same asset bubbles that sparked the credit crisis in the wealthy world.
The IMF painted a more sobering picture for wealthier countries, which remain saddled with high unemployment rates, unsustainable budget deficits and face a "sluggish" economic recovery.
In a semi-annual report on the world economy, the IMF said the recovery was gathering steam as financial sectors were healing and trade flows were rising. It predicted global growth of 4.2 per cent in 2010, up slightly from a January forecast of 3.9 per cent. Its 2011 growth prediction remained steady at 4.3 per cent.
Much of the growth is because of developing economies, which together will climb 6.3 per cent this year and 6.5 per cent next year. Advanced economies by contrast will grow just 2.3 per cent in 2010 and 2.4 per cent the following year.
Wealthier countries may never catch up, the result of "lasting damage" from a 2008 financial crisis that has devastated the wealth of households and forced many to spend money more cautiously.
While the crisis may have started in the United States, the world's largest economy is recovering faster than that of Europe and Japan. The US economy is predicted to grow by 3.1 per cent this year, compared to 1 per cent for the eurozone and 1.9 per cent for Japan.
A recovery may have taken hold even in the industrial world, but much of the growth over 2009 was the result of a massive injection of public funds into the economy. There were "few indications" that private sectors in the US, Europe or Japan could fill the gap and fuel a strong recovery, the IMF said.
Moreover, governments in wealthy economies had mostly run out of room to prop up their private sectors with public cash. That risked "leaving these fragile recoveries exposed to new shocks" in the coming year, the IMF said in its World Economic Outlook report.
The financial crisis caused the entire global economy to shrink 0.6 per cent in 2009. Yet the recovery picture is far different for emerging powers, which if anything faced a risk of their economies overheating in the coming years.
China's economy was projected to grow 10 per cent in 2010, India's by 8.8 per cent and Brazil's by 5.5 per cent, according to the IMF.
Developing powers have benefited from a sudden flow of investment out of struggling Europe and the US, but the IMF has warned that this carried its own risk of causing the same asset bubbles that sparked the credit crisis in the wealthy world.
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