IMF raises 2010 global growth forecast to 3%

The International Monetary Fund foresees a stronger than anticipated recovery from the economic crisis, with global growth approaching three percent in 2010, world leaders said.

The IMF had estimated in July a global contraction of 1.4 percent in 2009, followed by sluggish growth of 2.5 percent in 2010, but was more upbeat as Group of 20 leaders met in the US city of Pittsburgh.

“The IMF estimates that world growth will resume this year and rise by nearly 3.0 percent by the end of 2010,” the Group of 20 developed and emerging economies said in a final statement to conclude a two-day summit.

Leaders of 19 rich and emerging nations plus the European Union pledged they would work together to help the world economy reach robust growth. Points: Key G20 agreements

“Our objective is to return the world to high, sustainable, and balanced growth, while maintaining our commitment to fiscal responsibility and sustainability,” the group said.

“We commit to put in place the necessary policy measures to achieve these outcomes.”

Asia-led growth has lifted the world out of the doldrums and France, Germany and Japan have all now officially climbed out of recession with the United States, the world’s biggest economy, expected to follow later this year.

But G20 leaders were still cautious and agreed not to roll back massive stimulus measures that helped them contain a severe global recession following last year’s financial meltdown.

“We will avoid any premature withdrawal of stimulus,” the leaders’ statement said after a summit that endorsed a shift in voting rights at the IMF to give emerging nations, such as India and China, a greater voice.

“At the same time, we will prepare our exit strategies and, when the time is right, withdraw our extraordinary policy support in a cooperative and coordinated way, maintaining our commitment to fiscal responsibility,” it said.

China, which fears US deficits will destabilize the dollar, has been cheering on those calling for cuts in Washington’s massive stimulus measures that have been propping up key sectors of the global economy.

G20 leaders announced Friday a grand overhaul of economic governance centered on giving the IMF a greater monitoring role and addressing imbalances in global trade and budgets that are blamed for fueling the crisis.

“We agreed to launch a framework that lays out the policies and the way we act together to generate strong, sustainable and balanced global growth,” the joint Pittsburgh G20 statement said.–AFP